The Link Between Fertility and Retirement

This project investigates how retirement and fertility decisions are interconnected across generations in the United States, focusing on grandparents' role as informal childcare providers. Calvo and Hong will use unique restricted-use tax records data from the U.S. spanning almost 30 years combined with rich survey data. Through an event study design, they will analyze how grandparental retirement affects adult children's fertility and labor market outcomes, and conversely, how grandchildren's arrivals influence grandparents' retirement decisions. Their comprehensive data allows them to explore important mechanisms, such as decisions of adult children to co-locate with grandparents, as well as the role that formal childcare price play in these decisions. The administrative data allows them to explore how such intergenerational dynamics vary across demographic groups and household structures (e.g., single mothers vs. married couples). To quantify the impact of informal grandparental care on aggregate labor market outcomes and evaluate potential policy interventions, they will develop a structural model of household decision-making of multigenerational households, in which adult children and grandparents make joint decisions about labor supply, retirement, and childcare arrangements. Their research carries significant implications for labor market policies affecting both older and younger workers, particularly regarding retirement age regulations and childcare subsidy programs.