Can pensions impact fertility in Africa?

Tra­di­tion­ally, the issues of social pro­tec­tion and pop­u­la­tion growth have been stud­ied sep­ar­ately. Where does this idea that there is a link between fer­til­ity and the pen­sion sys­tem come from?

This is not a new idea. Since the 1950s, soci­olo­gists and demo­graph­ers have high­lighted the role of social pro­tec­tion sys­tems, and more spe­cific­ally pen­sions, in fer­til­ity. By car­ry­ing out opin­ion sur­veys in the field, they have found that eco­nom­ic reas­ons appear to be very well placed in the motiv­a­tions of respond­ents for hav­ing chil­dren: people repro­duce to keep the fam­ily busi­ness going, to mul­tiply the fam­ily’s income and to provide for their old age. All in all, this phe­nomen­on is quite logical.

The fact remains that these qual­it­at­ive stud­ies were not able to meas­ure the quant­it­at­ive impact of this or that meas­ure on fer­til­ity: when a gov­ern­ment sets up a pen­sion sys­tem, does fer­til­ity fall by one, two or three chil­dren per woman, for example? The study I con­duc­ted in Nam­i­bia showed that the intro­duc­tion of a pen­sion sys­tem reduced the coun­try’s birth rate by at least one child per woman.

Why did you choose Nam­i­bia as a case study?

A few coun­tries in Africa have set up non-con­trib­ut­ory pen­sion sys­tems, i.e. they do not depend on the con­tri­bu­tions of mem­bers, and there­fore bene­fit the entire eld­erly pop­u­la­tion. Among them was South Africa which, at the end of apartheid, set up a gen­er­ous pen­sion scheme, thus becom­ing a kind of world labor­at­ory for the study of the socio-eco­nom­ic implic­a­tions of the basic pen­sion. The prob­lem is that there was not enough usable data before this reform to be able to exam­ine the con­sequences of pen­sions on fer­til­ity in detail.

So, I turned to Nam­i­bia – a former South Afric­an province – which intro­duced an equi­val­ent sys­tem after inde­pend­ence in 1990. In the mid-1990s, all Nam­i­bi­ans over the age of 60 star­ted receiv­ing a kind of old-age min­im­um equi­val­ent to three times the poverty line ($1 a day at the time), or $90 a month in pur­chas­ing power par­ity. The effect on the birth rate was immediate.

There­fore, since they were anti­cip­at­ing that they would receive this money in the future, women star­ted hav­ing few­er children?

Yes, that is what the study shows. In a dec­ade, the birth rate in my sample dropped from almost 6 chil­dren per woman to 4. Not all of this is due to the pen­sion sys­tem, as we shall see, but the study has shown that the intro­duc­tion of a uni­ver­sal old-age pen­sion reduces fer­til­ity by at least one child per woman. This phe­nomen­on is more vis­ible among older women (over 30), prob­ably because they anti­cip­ate their future retire­ment more.

How can we be sure that oth­er factors did not influ­ence fertility?

This was the dif­fi­culty of the study. Many factors can influ­ence a coun­try’s birth rate: school­ing, urb­an­isa­tion, but also the reduc­tion in poverty, access to health­care, the reduc­tion in infant mor­tal­ity, or the intro­duc­tion of oth­er social expendit­ure, such as fam­ily allow­ances (which tend to work in the oppos­ite dir­ec­tion). In Nam­i­bia, pen­sions con­sti­tute 90% of the coun­try’s social expendit­ure, so there was danger of con­fu­sion. To neut­ral­ise the oth­er factors, it was neces­sary to isol­ate the ‘vari­able of interest’ (pen­sions), by con­sti­tut­ing two groups of people, more or less affected by the reform.

In this sense, Nam­i­bia was an ideal example, as the reform was imple­men­ted gradu­ally, so it was easy to meas­ure its effects on dif­fer­ent study groups. Before 1992, some eth­nic groups already had access to a pen­sion sys­tem, but the actu­al cov­er­age var­ied from 30 to 80% depend­ing on the region. It was not until the late 1990s that full cov­er­age was achieved. From then on, it was pos­sible to isol­ate pen­sions from oth­er phe­nom­ena that applied uni­formly to all groups. This led to the con­clu­sion that pen­sions could be attrib­uted to a decline in the num­ber of chil­dren of at least one child per woman. And that, over­all, the actu­al amount of the bene­fit had less of an impact on fer­til­ity than the imple­ment­a­tion of the sys­tem itself.

Today, devel­op­ment aid focuses more on fam­ily plan­ning and con­tra­cep­tion. Why is this so?

Because it is too often assumed that the num­ber of chil­dren does not depend on women’s choices, but on poor preg­nancy con­trol and lim­ited access to con­tra­cep­tion. In the past, this assump­tion has been explored with the estab­lish­ment of fam­ily plan­ning and con­tra­cept­ive pro­grammes in sev­er­al Asi­an coun­tries. In the 1970s, an influ­en­tial study in Bangladesh, for example, found that these meas­ures reduced births by about one child per woman. But today eco­nom­ists are find­ing it harder to estab­lish the effect­ive­ness of these plan­ning policies on the birth rate, espe­cially in Africa. Every year, bil­lions are spent by OECD gov­ern­ments and large inter­na­tion­al NGOs to improve access to con­tra­cep­tion. Even if this is not their only object­ive, the impact on the birth rate of Afric­an coun­tries is not very visible.

Interview by Julie de la Brosse