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Old-age Support and Demographic Transition in Developing Countries. A Cultural Transmission Model

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  • Javier Olivera

    (UCD Geary Institute, University College Dublin)

Abstract

We model intergenerational old-age support within the context of a developing country that faces demographic transition: declining fertility and increasing life expectancy. We attempt to answer if agents will be able to support their parents during the next generations and under what conditions. For this purpose we use a three period overlapping generations model and a cultural transmission process, in which agents may be socialized to different cultural family models (old-age supporters and non-supporters). As life expectancy increases, we find conditions under which a reduced fertility rate is compatible with the expectation to be supported during old-age. This offers an additional explanation for the persistency of family old-age support in developing countries facing demographic transsition.

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File URL: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201307.pdf
File Function: First version, 2013
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Bibliographic Info

Paper provided by Geary Institute, University College Dublin in its series Working Papers with number 201307.

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Length: 36 pages
Date of creation: 09 May 2013
Date of revision:
Handle: RePEc:ucd:wpaper:201307

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Keywords: Cultural transmission; intergenerational transfers; fertility;

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References

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  1. Gregory Ponthiere, 2010. "Unequal Longevities and Lifestyles Transmission," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(1), pages 93-126, 02.
  2. LEROUX, Marie-Louise & PESTIEAU, Pierre & PONTHIERE, Grégory, . "Longevity, genes and efforts: an optimal taxation approach to prevention," CORE Discussion Papers RP -2309, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Fernández, Raquel & Fogli, Alessandra, 2005. "Fertility: The Role of Culture and Family Experience," CEPR Discussion Papers 5221, C.E.P.R. Discussion Papers.
  4. Michele Boldrin & Larry E. Jones, 2002. "Mortality, Fertility, and Saving in a Malthusian Economy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 775-814, October.
  5. BAUDIN, Thomas, . "A role for cultural transmission in fertility transitions," CORE Discussion Papers RP -2252, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Dahan, Momi & Tsiddon, Daniel, 1998. " Demographic Transition, Income Distribution, and Economic Growth," Journal of Economic Growth, Springer, vol. 3(1), pages 29-52, March.
  7. K Blackburn & G P Cipriani, 2002. "Intergenerational Transfers and Demographic Transition," Centre for Growth and Business Cycle Research Discussion Paper Series 14, Economics, The Univeristy of Manchester.
  8. Alberto Bisin & Giorgio Topa & Thierry Verdier, 2009. "Cultural transmission, socialization and the population dynamics of multiple-trait distributions," International Journal of Economic Theory, The International Society for Economic Theory, vol. 5(1), pages 139-154.
  9. Willis, Robert J, 1973. "A New Approach to the Economic Theory of Fertility Behavior," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S14-64, Part II, .
  10. Cox, Donald & Stark, Oded, 2004. "On The Demand For Grandchildren: Tied Transfers And The Demonstration Effect," Discussion Papers 18751, University of Bonn, Center for Development Research (ZEF).
  11. Bisin, A. & Verdier, T., 1997. "The Economics of Cultural Transmission and the Dynamics of Preferences," DELTA Working Papers 97-03, DELTA (Ecole normale supérieure).
  12. Lau, Sau-Him Paul, 2009. "Demographic structure and capital accumulation: A quantitative assessment," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 554-567, March.
  13. Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," NBER Working Papers 16512, National Bureau of Economic Research, Inc.
  14. Morand, Olivier F, 1999. " Endogenous Fertility, Income Distribution, and Growth," Journal of Economic Growth, Springer, vol. 4(3), pages 331-49, September.
  15. Palivos, Theodore, 2001. "Social norms, fertility and economic development," Journal of Economic Dynamics and Control, Elsevier, vol. 25(12), pages 1919-1934, December.
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Cited by:
  1. Ponthiere Gregory, 2013. "Long-Term Care, Altruism and Socialization," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(2), pages 429-471, October.
  2. repec:hal:wpaper:halshs-00622385 is not listed on IDEAS

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