IDEAS home Printed from https://ideas.repec.org/a/bla/manchs/v69y2001i5p586-605.html
   My bibliography  Save this article

Endogenous Fertility, Endogenous Growth and Public Pension System: Should We Switch from a Pay‐As‐You‐Go to a Fully Funded System?

Author

Listed:
  • Yeopil Yoon
  • Gabriel Talmain

Abstract

In this paper we study the implications of state pension plan reform on fertility and on growth. We extend the Grossman and Yanagawa endogenous growth framework by incorporating altruism, making fertility endogenous. We investigate the effect on long‐run growth of a switch from a pay‐as‐you‐go (PAYG) pension system to a fully funded system. We show that a PAYG pension system is associated with a lower fertility rate than a fully funded system. This lower fertility in turn increases the rate of growth. Hence, switching from a PAYG system to a fully funded system may be harmful, especially for developing countries in which limited resources are heavily stressed by high fertility rates. In addition, we propose a hypothetical pension system, the saving subsidy programme (SSP), which would yield a higher growth rate than the PAYG system. The SSP consists of a minimum benefit level for each retired and of a subsidy to private savings.

Suggested Citation

  • Yeopil Yoon & Gabriel Talmain, 2001. "Endogenous Fertility, Endogenous Growth and Public Pension System: Should We Switch from a Pay‐As‐You‐Go to a Fully Funded System?," Manchester School, University of Manchester, vol. 69(5), pages 586-605, October.
    • Handle: RePEc:bla:manchs:v:69:y:2001:i:5:p:586-605
    DOI: 10.1111/1467-9957.00271
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1467-9957.00271
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1467-9957.00271?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michele BOLDRIN & Mariacristina DE NARDI & Larry E. JONES, 2015. "Fertility and Social Security," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 81(3), pages 261-299, September.
    2. Yasuoka, Masaya, 2018. "How Should A Government Finance for Pension Benefit?," MPRA Paper 87483, University Library of Munich, Germany.
    3. Oskari Juurikkala, 2007. "Pensions, Fertility And Families," Economic Affairs, Wiley Blackwell, vol. 27(4), pages 52-57, December.
    4. Ulrich van Suntum, "undated". "A way out of pay-as-you-go without a double burden," Working Papers 200105, Institute of Spatial and Housing Economics, Munster Universitary.
    5. Johannes Holler, 2007. "Pension Systems and their Influence on Fertility and Growth," Vienna Economics Papers vie0704, University of Vienna, Department of Economics.
    6. Johannes Holler, 2007. "Pension Systems and their Influence on Fertility and Growth," Vienna Economics Papers 0704, University of Vienna, Department of Economics.
    7. Masaya Yasuoka, 2021. "How should a government finance pension benefits?," Australian Economic Papers, Wiley Blackwell, vol. 60(1), pages 138-152, March.
    8. Koichi Miyazaki, 2013. "Pay-as-you-go social security and endogenous fertility in a neoclassical growth model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 1233-1250, July.
    9. Zou, Tieding, 2016. "人口冲击、环境变动与家庭养老——基于多因素分解视角 [Effects of Population and Environment Changing on Family Pension——Based on the perspective of Its Factors]," MPRA Paper 79760, University Library of Munich, Germany, revised 16 Jan 2017.
    10. van Suntum, Ulrich, 2010. "A way out of pay-as-you-go without a double burden," CAWM Discussion Papers 27, University of Münster, Münster Center for Economic Policy (MEP).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:manchs:v:69:y:2001:i:5:p:586-605. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/semanuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.