School of Economics and Finance

No. 748: Roadblocks on the Road to Grandma’s House: Fertility Consequences of Delayed Retirement

Erich Battistin , Queen Mary University of London, IRVAPP and IZA
Michele De Nadai , University of New South Wales
Mario Padula , Università della Svizzera italiana, IdEP, CSEF and CEPR

June 23, 2015

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We investigate the role of grandparental childcare for fertility decisions of their offspring. Exploiting pension reforms in Italy, we argue that delayed retirement represents a negative shock to the supply of informal childcare for the next generation. We show that, when the maternal grandmother is not available, motherhood after age 30 is less likely. This effect persists as the woman ages, and parallels that on number of children. We argue that these are permanent changes to completed fertility for many cohorts in our data. Consistent with our interpretation, we show that results are limited to the most familistic close-knits where the role of grandparents is more important, and that are not the mechanical consequence of changes of living arrangements and labor supply. Given the Italian lowest low fertility, we conclude that pension reforms may have had unintended inter-generational effects.

J.E.L classification codes: J08, J13, H42

Keywords:Fertility, Informal child care, Pension reforms