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Optimal social security in a dynastic model with human capital externalities, fertility and endogenous growth

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  • Yew, Siew Ling
  • Zhang, Jie

Abstract

In this paper we investigate the optimal scale of pay-as-you-go social security in a dynastic family model with human capital externalities, fertility and endogenous growth. Human capital externalities reduce the return to human capital investment and hence lead to under-investment in human capital and over-reproduction of the population. If the taste for the number of children is sufficiently weak relative to the taste for the welfare of children, social security can be welfare enhancing by reducing fertility and raising human capital investment per child.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 93 (2009)
Issue (Month): 3-4 (April)
Pages: 605-619

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Handle: RePEc:eee:pubeco:v:93:y:2009:i:3-4:p:605-619

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Web page: http://www.elsevier.com/locate/inca/505578

Related research

Keywords: Social security Welfare Fertility Human capital externalities Savings;

References

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Citations

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Cited by:
  1. Richard C. Barnett & Joydeep Bhattacharya & Mikko Puhakka, 2012. "Private versus Public Old-Age Security," DEGIT Conference Papers c017_043, DEGIT, Dynamics, Economic Growth, and International Trade.
  2. Akira Momota & Ryo Horii, 2013. "Timing of childbirth, capital accumulation, and economic welfare," Oxford Economic Papers, Oxford University Press, vol. 65(2), pages 494-522, April.
  3. Yew, Siew Ling & Zhang, Jie, 2013. "Socially optimal social security and education subsidization in a dynastic model with human capital externalities, fertility and endogenous growth," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 154-175.
  4. Spataro, Luca & Renström, Thomas I., 2012. "Optimal taxation, critical-level utilitarianism and economic growth," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 727-738.
  5. Tatsuya Omori, 2009. "Effects of public education and social security on fertility," Journal of Population Economics, Springer, vol. 22(3), pages 585-601, July.

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