How a Pay-As-You-Go Pension System Can Lead To a Pareto Improvement in an OLG Model with Endogenous Fertility
Mostly, all developed countries have the problem that the total fertility rate is below its sustainable level. Therefore, all these countries face economic problems caused by a demographic change. In this paper, we show that given certain conditions a pay-as-you-go pension system where the pension depends only on the number of own children leads to a Pareto improvement and to an increase of the total fertility rate. To show this we use an Overlapping Generation model with endogenous fertility in a small open economy.
Volume (Year): 3 (2013)
Issue (Month): 1 (June)
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