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A Perfect Marriage: Child-related Pensions and Public Education

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  • Michael Voigtländer

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Abstract

In the present paper the effects of different pay-as-you-go pension systems on fertility decisions of a representative household are examined. Thereby, the analysis focuses especially on the interplay of parental quantity and quality decisions, introduced by Becker (1960). As it will be shown, a traditional pay-as-you-go system in either case distorts decisions of parents leading to an erosion of the financial basis of the system. In contrast, the assessment of a child-related pay-as-you-go system is ambiguous. If parents are solely responsible for expenditures on the quality of children, it is inefficient, too. However, if it is combined with a device like public education, optimality can be restored.

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Paper provided by Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland in its series Otto-Wolff-Institut Discussion Paper Series with number 02/2004.

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Date of creation: Mar 2004
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Handle: RePEc:kln:owiwdp:dp_marriage

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Keywords: Pay-as-you-go; child-related pension; quantity and quality of children;

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  1. Gary S. Becker, 1960. "An Economic Analysis of Fertility," NBER Chapters, in: Demographic and Economic Change in Developed Countries, pages 209-240 National Bureau of Economic Research, Inc.
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Cited by:
  1. Michael Voigtländer, 2005. "Qualitative und quantitative Aspekte einer Elternrente?," List Forum Chapter, in: List Forum Band 31, edition 1, volume 3, chapter 13, pages 215-230 List Gesellschaft e.V..

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