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Social Security, Child Allowances, and Endogenous Fertility

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  • Oshio, Takashi
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    Abstract

    Based on a simple overlapping generations model with endogenous fertility, we show that the effectiveness of social security reform and childcare support depends much on the openness of the economy, altruism, and initial fertility. For example, introducing a child allowance, which is often expected to mitigate demographic pressures, might be ineffective in a closed economy. Downsizing a social security system, even with new taxes required to compensate for existing pension liabilities, could be welfare-improving in a closed economy. Altruistic bequests tend to offset intergenerational income transfer caused by policy changes, but a higher level of initial fertility makes the outcome indeterminate.

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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/14307/1/pie_dp171.pdf
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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/14307/3/pie_dp171_tables.pdf
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    Bibliographic Info

    Paper provided by Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University in its series Discussion Paper with number 171.

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    Length: 34, [4] p.
    Date of creation: Sep 2003
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    Handle: RePEc:hit:piedp1:171

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    1. Alessandro Cigno & Annalisa Luporini & Anna Pettini, 2000. "Tranfers to families with children as a principal-agent problem," CHILD Working Papers wp02_00, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    2. Alessandro Cigno & Luca Casolaro & Furio C. Rosati, 2000. "The Role of Social Security in Household Decisions: Var Estimates of Saving and Fertility Behaviour in Germany," CESifo Working Paper Series 394, CESifo Group Munich.
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