Fertility and pension systems

A broad political economy literature explained the introduction and expansion of pension systems, but the effects caused by the endogenous reduction of fertility have been largely disregarded, as the fertility choice is usually considered exogenous. This paper suggests a model that takes into account this effects and analyzes the net effect of the breakdown of family ties on the dimension of pension systems. The empirical analysis support an inverted-U development pattern: a continuous and progressive weakening of family ties, after inducing the introduction of pension systems, tends to reduce, ceteris paribus, their political support