IDEAS home Printed from https://ideas.repec.org/a/spr/jopoec/v26y2013i3p1233-1250.html
   My bibliography  Save this article

Pay-as-you-go social security and endogenous fertility in a neoclassical growth model

Author

Listed:
  • Koichi Miyazaki

    ()

Abstract

This paper theoretically studies how unfunded pay-as-you-go social security affects economic growth, the fertility rate, and welfare in a neoclassical growth model. In addition, this paper considers a more general form of child-rearing cost, which is a mixture of time and money. The first observation is that whether the fertility rate increases or not by the expansion of the pay-as-you-go social security depends on (1) the size of the monetary child-rearing cost relative to the time spent on child-rearing and (2) the current fertility and interest rate in laissez faire. The second observation is that income per worker can increase by an expansion in pay-as-you-go social security when the output elasticity of capital is sufficiently small and the payroll tax rate is high. The last finding is that welfare can be improved even though capital is underaccumulated in an economy. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • 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.
  • Handle: RePEc:spr:jopoec:v:26:y:2013:i:3:p:1233-1250
    DOI: 10.1007/s00148-012-0451-7
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s00148-012-0451-7
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lapan, Harvey E. & Enders, Walter, 1990. "Endogenous fertility, Ricardian equivalence, and debt management policy," Journal of Public Economics, Elsevier, vol. 41(2), pages 227-248, March.
    2. Cigno, Alessandro, 1995. "Public pensions with endogenous fertility: Comment on Nishimura and Zhang," Journal of Public Economics, Elsevier, vol. 57(1), pages 169-173, May.
    3. Alessandro Cigno, 2010. "How to Avoid a Pension Crisis: A Question of Intelligent System Design ," CESifo Economic Studies, CESifo, vol. 56(1), pages 21-37, March.
    4. 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.
    5. Bental, Benjamin, 1989. "The Old Age Security Hypothesis and Optimal Population Growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 1(4), pages 285-301.
    6. 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.
    7. Alessandro Cigno, 2006. "A constitutional theory of the family," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 259-283, June.
    8. Yeopil Yoon & Gabriel Talmain, "undated". "Endogenous Fertility, Endogenous Growth and Public Pension System: Should We Switch from a PAYG to a Fully-Funded System?," Discussion Papers 00/31, Department of Economics, University of York.
    9. Deaton, Angus S & Muellbauer, John, 1986. "On Measuring Child Costs: With Applications to Poor Countries," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 720-744, August.
    10. Fanti, Luciano & Gori, Luca, 2010. "Increasing PAYG pension benefits and reducing contribution rates," Economics Letters, Elsevier, vol. 107(2), pages 81-84, May.
    11. Barro, Robert J & Becker, Gary S, 1989. "Fertility Choice in a Model of Economic Growth," Econometrica, Econometric Society, vol. 57(2), pages 481-501, March.
    12. Nishimura, Kazuo & Zhang, Junsen, 1992. "Pay-as-you-go public pensions with endogenous fertility," Journal of Public Economics, Elsevier, vol. 48(2), pages 239-258, July.
    13. Cigno, Alessandro & Rosati, Furio C., 1996. "Jointly determined saving and fertility behaviour: Theory, and estimates for Germany, Italy, UK and USA," European Economic Review, Elsevier, vol. 40(8), pages 1561-1589, November.
    14. Philippe Michel & Bertrand Wigniolle, 2007. "On Efficient Child Making," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(2), pages 307-326, May.
    15. 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.
    16. 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.
    17. Fanti, Luciano & Gori, Luca, 2012. "A note on endogenous fertility, child allowances and poverty traps," Economics Letters, Elsevier, vol. 117(3), pages 722-726.
    18. Eckstein, Zvi & Wolpin, Kenneth I., 1985. "Endogenous fertility and optimal population size," Journal of Public Economics, Elsevier, vol. 27(1), pages 93-106, June.
    19. David de la Croix & Matthias Doepke, 2003. "Inequality and Growth: Why Differential Fertility Matters," American Economic Review, American Economic Association, vol. 93(4), pages 1091-1113, September.
    20. 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.
    21. repec:cor:louvrp:-1676 is not listed on IDEAS
    22. Apps, Patricia & Rees, Ray, 2001. "Household production, full consumption and the costs of children," Labour Economics, Elsevier, vol. 8(6), pages 621-648, December.
    23. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, Oxford University Press, vol. 103(1), pages 1-25.
    24. Zhang, Junxi, 1995. "Does unfunded social security also depress output growth?," Economics Letters, Elsevier, vol. 49(3), pages 307-312, September.
    25. Wildasin, David E, 1990. "Non-neutrality of Debt with Endogenous Fertility," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 414-428, April.
    26. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. repec:eee:hapoch:v1_609 is not listed on IDEAS
    2. Miyazaki, Koichi, 2016. "Student loans, fertility, and economic growth," MPRA Paper 71604, University Library of Munich, Germany.
    3. Kazumasa Oguro & Masaya Yasuoka, 2017. "Stress, Child Care, and Fertility," Discussion Paper Series 153, School of Economics, Kwansei Gakuin University, revised Jan 2017.
    4. Masaya Yasuoka, 2018. "Fertility, Income Growth and Inflation," Discussion Paper Series 182, School of Economics, Kwansei Gakuin University, revised Jul 2018.
    5. Cigno, A., 2016. "Conflict and Cooperation Within the Family, and Between the State and the Family, in the Provision of Old-Age Security," Handbook of the Economics of Population Aging, Elsevier.
    6. Luciano Fanti, 2014. "Raising the Mandatory Retirement Age and its Effect on Long-run Income and Pay-as-you-go (PAYG) Pensions," Metroeconomica, Wiley Blackwell, vol. 65(4), pages 619-645, November.

    More about this item

    Keywords

    Fertility; Child-rearing cost; Pay-as-you-go social security; Neoclassical growth; D91; H55; J13;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

    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:spr:jopoec:v:26:y:2013:i:3:p:1233-1250. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.