Maximum size of social security in a model of endogenous fertility
AbstractSocial security tends to be unsustainable in nature. It reduces individuals'' demand for children as a measure to support their lifestyle during old age, which in turn undermines the financial basis of social security. Using a simple overlapping generations model with endogenous fertility and income transfer from children to parents, we discuss the maximum size of a pay-as-you-go social security program that can prevent a cumulative reduction of fertility and make a program sustainable. We also show that a child-care allowance raises the maximum size of the program and raises an individual''s lifetime utility.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 29 (2009)
Issue (Month): 2 ()
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social security; fertility; intergenerational income transfer;
Find related papers by JEL classification:
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
- H5 - Public Economics - - National Government Expenditures and Related Policies
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Munich Reprints in Economics
19606, University of Munich, Department of Economics.
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- Makoto Hirazawa & Akira Yakita, 2009. "Fertility, child care outside the home, and pay-as-you-go social security," Journal of Population Economics, Springer, vol. 22(3), pages 565-583, July.
- Masaya Yasuoka, 2014. "Child-care Policies and Pension in an Endogenous Fertility Model," Discussion Paper Series 114, School of Economics, Kwansei Gakuin University, revised Jan 2014.
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