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Effect of Social Security on Fertility and Savings: An Overlapping Generations Model

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  • Lakshmi Kanta Raut

    (University of California)

Abstract

This paper studies the general equilibrium effects of various social security programs on the rates of population growth and capital accumulation within an overlapping generations framework with endogenous fertility and savings. It also shows that if the rate of intergenerational transfers of income from old to young or child care cost is low, a competitive equilibrium follows a path of over population and capital accumulation in a modified Pareto Optimal sense; a social security program in such a case is Pareto improving. A fully funded system is not neutral if it is financed by child - taxes. It also shows that unlike in the case of exogenous fertility where competitive equilibrium attains steady-state only asymptotically, when fertility is endogenous it may attain a unique globally stable steady state in finite time.

Suggested Citation

  • Lakshmi Kanta Raut, 1992. "Effect of Social Security on Fertility and Savings: An Overlapping Generations Model," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 27(1), pages 25-43, July.
    • Handle: RePEc:dse:indecr:v:27:y:1992:i:1:p:25-43
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    Citations

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    Cited by:

    1. Lakshmi K Raut, 1997. "Learning to Perfect Manipulation: Implications for Fertility, Savings, and Old-Age Social Security," Working Papers 199704, University of Hawaii at Manoa, Department of Economics.
    2. J. Ignacio Conde-Ruiz & Eduardo L. Giménez & Mikel Pérez-Nievas, 2010. "Millian Efficiency with Endogenous Fertility," Review of Economic Studies, Oxford University Press, vol. 77(1), pages 154-187.
    3. Peter J. Stauvermann & Ronald R. Kumar, 2017. "Enhancing growth and welfare through debt-financed education," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 30(1), pages 207-222, January.
    4. Lakshmi K. Raut, 1996. "Subgame perfect manipulation of children by overlapping generations of agents with two-sided altruism and endogenous fertility," Labor and Demography 9604003, University Library of Munich, Germany.
    5. Stauvermann Peter, 1997. "Endogenes Wachstum, Fertilität und Sozialversicherung in Entwicklungsländern / Endogenous Growth, Fertility and Social Security," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 216(2), pages 175-193, April.
    6. Kazuo Nishimura & Lakshmi K. Raut, 2013. "Family Expansion and Capital Accumulation of a Dynasty," Studies in Microeconomics, , vol. 1(2), pages 221-234, December.
    7. Peter J. Stauvermann & Ronald R. Kumar, 2016. "Sustainability of A Pay-as-you-Go Pension System in A Small Open Economy with Ageing, Human Capital and Endogenous Fertility," Metroeconomica, Wiley Blackwell, vol. 67(1), pages 2-20, February.
    8. Pérez-Nievas, Mikel & Conde-Ruiz, José I. & Giménez, Eduardo L., 2019. "Efficiency and endogenous fertility," Theoretical Economics, Econometric Society, vol. 14(2), May.
    9. Wei-bin Zhang, 2011. "Elastic Labour Supply and Home Production in a Monetary Growth Model," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 9(2), pages 87-100.
    10. Wei Bin Zhang, 2015. "Progressive Income Taxation and Economic Growth with Endogenous Labor Supply and Public Good," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 1, September.
    11. Stauvermann, Peter Josef & Kumar, Ronald, 2013. "Financing human capital development via government debt: a small country case using overlapping generations framework," MPRA Paper 47453, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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