Fertility and retirement benefits of women - could fertility be stimulated by pension reforms?

Irena E. Kotowska, Warsaw School of Economics
Paweł A. Strzelecki, Warsaw School of Economics
Joanna Stachura, CASE - Center for Social and Economic Research

In debates on determinants of low fertility and policy measures aimed to its rise factors related to labour market participation of women are increasingly referred to. They are mostly considered in terms of reconciling employment and family duties, however, arguments about childbearing penalties in old-age benefits of women are voiced as well. Therefore, one might ask whether rules providing better old-age benefits to females could be altered not only to ensure higher benefits to them but also to stimulate fertility? To study relationships between fertility and retirement benefits the microsimulation model has been formulated which accounts for different labour market behaviours of males and females by age, education, the number of children and timing of children. By use of the LFS data on the employment patterns by age for males and females, specified for different education levels and childbearing characteristics as well as the gender-education-age specific data on wages for Italy, Latvia, Lithuania, Poland, and Germany (input data) the future retirements benefits are simulated under three variants to demonstrate impacts of the labour market structure, pension systems and childcare responsibilities on future retirements benefits of women. Simulation results show that fertility postponement, considered as an important determinant of persisting low fertility, contributes positively to future old-age benefits of mothers. They also allow to conclude that work-family reconciliation measures aimed at keeping mothers in employment seem to be more effective in terms of retirement benefits and reducing work-family tensions which could in turn facilitate decisions about children.