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Risk aversion and fertility. Evidence from a lottery question in Italy

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Abstract

This article aims at contributing to the literature on fertility decision making process. The authors analyze an overlooked but potentially crucial factor, the preference for risk. A typology of fertility decision making process based on risk tolerance and attractiveness of parenthood is proposed. Empirically, the authors rely on a lottery question included in Italian longitudinal representative data. Results indicate that the most risk averse individuals have the highest probability to have a(n additional) child. This is consistent with the Hedger ideal type that considers children as an insurance. The most risk tolerant individuals, instead, in line with the Individualist type, seem to perceive fertility as incompatible with alternative risky and rewarding behaviors. This conflict results particularly strong for low-income individuals. Our findings point to the importance of considering risk tolerance in fertility research to gain a more complete understanding of heterogeneity in fertility behaviors.

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  • Daniela Bellani & Bruno Arpino, 2021. "Risk aversion and fertility. Evidence from a lottery question in Italy," Econometrics Working Papers Archive 2021_02, Universita' degli Studi di Firenze, Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti".
    • Handle: RePEc:fir:econom:wp2021_02
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    1. Daniele Vignoli & Alessandra Minello & Giacomo Bazzani & Camilla Matera & Chiara Rapallini, 2021. "Economic Uncertainty and Fertility Intentions: The Causal Effect of Narratives of the Future," Econometrics Working Papers Archive 2021_05, Universita' degli Studi di Firenze, Dipartimento di Statistica, Informatica, Applicazioni "G. Parenti".
    2. Daniela Bellani & Bruno Arpino & Daniele Vignoli, 2021. "Time preferences and fertility: Evidence from Italy," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 44(50), pages 1185-1228.
    3. Daniele Vignoli & Alessandra Minello & Giacomo Bazzani & Camilla Matera & Chiara Rapallini, 2022. "Narratives of the Future Affect Fertility: Evidence from a Laboratory Experiment," European Journal of Population, Springer;European Association for Population Studies, vol. 38(1), pages 93-124, March.
    4. Luc Meunier & Sima Ohadi, 2021. "The Impact of the COVID-19 Crisis on Individuals' Risk and Time Preferences," Economics Bulletin, AccessEcon, vol. 41(3), pages 1050-1069.

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    fertility; risk aversion; risk preference;
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