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Fertility and PAYG pensions in the overlapping generations model

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  • Luciano Fanti
  • Luca Gori

Abstract

This article analyses how long-run pay-as-you-go public pensions react to a change in fertility in the basic overlapping generations model of neoclassical growth. While it would seem well established both in the academic and political debates that the decline in fertility represents a “demographic time bomb” for the sustainability of public pensions, it is shown that a falling birth rate need not necessarily cause long-run pension benefit to fall.
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Suggested Citation

  • Luciano Fanti & Luca Gori, 2012. "Fertility and PAYG pensions in the overlapping generations model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 955-961, July.
  • Handle: RePEc:spr:jopoec:v:25:y:2012:i:3:p:955-961
    DOI: 10.1007/s00148-011-0359-7
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    More about this item

    Keywords

    Fertility; PAYG pensions; OLG model; J26; O41;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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