Munich Personal RePEc Archive

Insecure old-age security

Jellal, Mohamed and wolff, François charles (2002): Insecure old-age security. Published in: Oxford Economic Papers No. 54 (2002), 636–648 636

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In this paper, we examine the old-age security hypothesis according to which parents rear children because they expect the latter to care for them in their later years. In developing countries where there are no perfect capital markets, children are usually viewed as a potential source of income and as a time-related support in old age. However, investing in children remains risky. By focusing on uncertainty about the parental consumption during old age, we show that there exists a precautionary motive for the demand for children so that fertility of prudent parents is expected to increase.

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