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Backward Intergenerational Goods and Endogenous Fertility

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  • JOHN WILLIAM HATFIELD

Abstract

This paper characterizes the consequences of introducing the public provision of intergenerational goods to the elderly in a model with endogenous fertility. With exogenous fertility, it has been shown that the government can mandate the first‐best outcome by simply imposing the socially optimal transfer. By contrast, with endogenous fertility, the government can no longer enforce this outcome. This is due, in part, to the effects of mandatory provision on the birth rate. However, taxes may still have a salubrious effect on social welfare as they can eliminate particularly bad equilibria.

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  • John William Hatfield, 2008. "Backward Intergenerational Goods and Endogenous Fertility," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(5), pages 765-784, October.
    • Handle: RePEc:bla:jpbect:v:10:y:2008:i:5:p:765-784
    DOI: 10.1111/j.1467-9779.2008.00385.x
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    References listed on IDEAS

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    Cited by:

    1. John P. Conley & Robert Driskill & Ping Wang, 2019. "Capitalization, decentralization, and intergenerational spillovers in a Tiebout economy with a durable public good," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 67(1), pages 1-27, February.
    2. Darong Dai & Liqun Liu & Guoqiang Tian, 2019. "Interregional redistribution and budget institutions with private information on intergenerational externality," Review of Economic Design, Springer;Society for Economic Design, vol. 23(3), pages 127-154, December.

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