Retirement, Intergenerational Time Transfers, and Fertility

Abstract

Retired parents might invest time in their adult children by providing childcare. Such intergenerational time transfers can have important implications for family decisions. This paper estimates the effects of parental retirement on the fertility of their adult children. We use representative panel data from Germany to link observations on parents and their adult children. We exploit eligibility ages for early retirement for identification in a regression discontinuity and pension reforms in a difference-in-differences design. The results suggest that parents’ retirement positively influences the fertility of their adult children, which is mainly driven by an increase in the likelihood of having a second birth. However, while parental retirement affects the timing of the fertility of their adult children, it does not affect the children's total fertility.