Fertility Choice and Financial Development

Valerio Filoso and Erasmo Papagni

MPRA Paper from University Library of Munich, Germany

Abstract: We study the consequences of broader access to credit and to capital markets on household's decisions over the number of children. In a life-cycle model of choice with forward and backward caring between parents and children, we analyze the effects of relaxing adults' borrowing constrains and broadening the opportunities for financial investment, and show how the sign of these effects depends on the role of children as a normal or inferior good in parents' preferences. We estimate the quantitative implications of our theoretical model on data from 145 countries over the period 1980--2006. Empirical results indicate that improved access to credit reduces fertility in poor countries and increases fertility in high-income countries. The effect of the development of capital markets on the number of children is negative in low-income countries and positive in the rich. When the analysis includes public pensions the main results remain the same. We also estimate the effect of the real interest rate, which proves significant and negative.

Keywords: Fertility; Financial Markets Development; Old-Age Security (search for similar items in EconPapers)
JEL-codes: D1 G1 J13 (search for similar items in EconPapers)
Date: 2010-10-15
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/25930/2/MPRA_paper_25930.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/56795/1/MPRA_paper_56795.pdf revised version (application/pdf)

Related works:
Journal Article: Fertility choice and financial development (2015)
Working Paper: Fertility Choice and Financial Development (2014)
Working Paper: Fertility Choice and Financial Development (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:25930

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().