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Maximum size of social security in a model of endogenous fertility


  • Takashi Oshio

    () (Hitotsubashi University)

  • Masaya Yasuoka

    () (The University of Kitakyushu)


Social security tends to be unsustainable in nature. It reduces individuals'' demand for children as a measure to support their lifestyle during old age, which in turn undermines the financial basis of social security. Using a simple overlapping generations model with endogenous fertility and income transfer from children to parents, we discuss the maximum size of a pay-as-you-go social security program that can prevent a cumulative reduction of fertility and make a program sustainable. We also show that a child-care allowance raises the maximum size of the program and raises an individual''s lifetime utility.

Suggested Citation

  • Takashi Oshio & Masaya Yasuoka, 2009. "Maximum size of social security in a model of endogenous fertility," Economics Bulletin, AccessEcon, vol. 29(2), pages 644-654.
  • Handle: RePEc:ebl:ecbull:eb-09-00228

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    References listed on IDEAS

    1. Sinn, Hans-Werner, 2004. "The pay-as-you-go pension system as fertility insurance and an enforcement device," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1335-1357, July.
    2. Robert Fenge & Volker Meier, 2005. "Pensions and fertility incentives," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 28-48, February.
    3. Makoto Hirazawa & Akira Yakita, 2009. "Fertility, child care outside the home, and pay-as-you-go social security," Journal of Population Economics, Springer;European Society for Population Economics, vol. 22(3), pages 565-583, July.
    4. Junsen Zhang & Junxi Zhang, 1998. "Social Security, Intergenerational Transfers, and Endogenous Growth," Canadian Journal of Economics, Canadian Economics Association, vol. 31(5), pages 1225-1241, November.
    5. van Groezen, Bas & Leers, Theo & Meijdam, Lex, 2003. "Social security and endogenous fertility: pensions and child allowances as siamese twins," Journal of Public Economics, Elsevier, vol. 87(2), pages 233-251, February.
    6. Berthold U. Wigger, 1999. "Pay-as-you-go financed public pensions in a model of endogenous growth and fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(4), pages 625-640.
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    Cited by:

    1. Yasuoka, Masaya & Goto, Naohisa, 2011. "Pension and child care policies with endogenous fertility," Economic Modelling, Elsevier, vol. 28(6), pages 2478-2482.
    2. Masaya Yasuoka & Naohisa Goto, 2015. "How is the child allowance to be financed? By income tax or consumption tax?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(3), pages 249-269, September.
    3. Masatoshi Jinno & Masaya Yasuoka, 2016. "Are the social security benefits of pensions or child-care policies best financed by a consumption tax?," Business and Economic Horizons (BEH), Prague Development Center, vol. 12(3), pages 94-112, September.
    4. Masaya Yasuoka, 2013. "Can Child-Care Support Policies Halt Decreasing Fertility?," International Journal of Economics and Financial Issues, Econjournals, vol. 3(2), pages 409-419.
    5. 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.
    6. Masaya Yasuoka, 2014. "Child-care Policies and Pension in an Endogenous Fertility Model," Discussion Paper Series 114, School of Economics, Kwansei Gakuin University, revised Jan 2014.

    More about this item


    social security; fertility; intergenerational income transfer;

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H5 - Public Economics - - National Government Expenditures and Related Policies


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