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Public Pensions, Family Allowances and Endogenous Demographic Change

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  • Peters, Wolfgang
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    Abstract

    In addition to an old-age insurance system which redistributes income from the young to the old, family allowances build a further redistributive system which typically favors younger and burdens older generations. Family allowances have tow main tasks: first, child allowances offer an incentive for child-bearing which influences fertility in an economy. Second, subsidies which ease the financial burden of a child's education guarantee a higher average level of productive skills and therefore enhance net domestic product. If individual demand for having and educating children leads to an impact on the economic system as a whole, we have external effects. In such a case, corrective taxation (Pigouvian tax) should be considered.

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    Bibliographic Info

    Article provided by Springer in its journal Journal of Population Economics.

    Volume (Year): 8 (1995)
    Issue (Month): 2 (May)
    Pages: 161-83

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    Handle: RePEc:spr:jopoec:v:8:y:1995:i:2:p:161-83

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