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Fertility, Intra‐Generational Redistribution, and Social Security Sustainability

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  • Makoto Hirazawa
  • Koji Kitaura
  • Akira Yakita

Abstract

Incorporating heterogeneity in preference to having children into an overlapping generations model of a small open economy, we examine the effects of changes in the size of pay‐as‐you‐go (PAYG) social security on fertility choices of individuals and population growth of the economy. It is shown that PAYG social security will raise population growth by increasing the number of individuals who have children and the number of children parents have if the system involves redistribution between retirees with different contributions, whereas, if it has no redistribution, PAYG social security does not affect the fertility decisions of individuals. Fécondité, redistribution intra‐générationnelle, et durabilité de la sécurité sociale. Incorporant l'hétérogénéité des préférences pour avoir des enfants dans un modèle d'une petite économie ouverte avec des générations qui se chevauchent, on examine les effets de changements dans l'importance de la sécurité sociale par répartition sur les choix de fécondité des individus et sur la croissance de la population dans l’économie. On montre que cette forme de sécurité sociale augmente la croissance de la population en accroissant à la fois le nombre de personnes qui ont des enfants et le nombre d'enfants que les parents choisissent d'avoir si le système implique une redistribution entre les gens à la retraite qui ont fait des contributions différentes, alors que, si le régime n'implique aucune redistribution, le régime de sécurité sociale par répartition n'affecte pas les décisions de fécondité des individus.

Suggested Citation

  • Makoto Hirazawa & Koji Kitaura & Akira Yakita, 2014. "Fertility, Intra‐Generational Redistribution, and Social Security Sustainability," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(1), pages 98-114, February.
    • Handle: RePEc:wly:canjec:v:47:y:2014:i:1:p:98-114
    DOI: 10.1111/caje.12069
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    Cited by:

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    2. Richard C. Barnett & Joydeep Bhattacharya & Mikko Puhakka, 2018. "Private versus public old-age security," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(3), pages 703-746, July.
    3. Yakita, Akira, 2018. "Parents’ strategic transfers and sibling competition in the presence of pay-as-you-go pensions," Economics Letters, Elsevier, vol. 170(C), pages 63-65.
    4. Mizuno, Masakatsu & Yakita, Akira, 2013. "Elderly labor supply and fertility decisions in aging-population economies," Economics Letters, Elsevier, vol. 121(3), pages 395-399.
    5. Day, Creina & Day, Garth, 2021. "Aging, voters and lower income tax: A role for pension design," Economic Modelling, Elsevier, vol. 94(C), pages 560-569.
    6. Akira Yakita, 2018. "Fertility and education decisions and child-care policy effects in a Nash-bargaining family model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(4), pages 1177-1201, October.

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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