Pensions and Fertility: Microeconomic Evidence

This study identifies the causal effect of pension generosity on wom-en's fertility behavior. It capitalizes on Brazil's expansion of the pen-sion system to rural workers, whose pension wealth subsequently more than tripled. Difference-in-difference, instrumental variable, and event study methods show that the pension reform reduces the propensity of childbearing of women of fertile age by 8 percent in the short run. Completed fertility declines by 1.3 children within 20 years after the reform, reducing the contribution base of the pay-as-you-go pension system in the long run. The fertility response is strongest at higher birth parities, among older women, and among mothers with sons. (JEL H55, I38, J13, J16, O15)