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From Malthusian to Modern fertility: When intergenerational transfers matter

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  • Luca Spataro
  • Luciano Fanti

Abstract

In a standard OLG model of a small open economy with logarithmic utility and endogenous fertility we show that the reversion of the relationship between fertility and wages (i.e. a transition from the Malthusian to the Modern fertility behaviour) may be possible in presence of intergenerational public transfers(i.e. public national debt or PAYG pensions). In fact, as known, the latter have been implemented mostly in the advanced Western Countries, where the fertility behavior reversion has mainly occurred. We show that such a reversion is more likely to occur in economies that are entailed with low interest rate, low costs for raising children and low degree of patience, and high preference for children.

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Bibliographic Info

Paper provided by Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy in its series Discussion Papers with number 2013/163.

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Date of creation: 01 May 2013
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Handle: RePEc:pie:dsedps:2013/163

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Keywords: overlapping generations; endogenous fertility; savings; small open economy; public national debt; PAYG pension scheme; demographic transition.;

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