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Endogenous Fertility Policy and Unfunded Pensions

Author

Listed:
  • Alison Booth
  • Facundo Sepulveda

Abstract

We study the joint determination of fertility subsidies and Social Security taxes in an overlapping generations model where agents are heterogeneous in endowments. In equilibria where Social Security is valued, old and poor young agents form a coalition that sustains Social Security. When voting for fertility subsidies, the young take into account both the deadweight loss of such subsidies and the gains from a higher future tax base. They also take into account a third e®ect of increasing population growth: that of a decrease in future Social Security benefits as a consequence of a change in the identity of the future decisive voter.

Suggested Citation

  • Alison Booth & Facundo Sepulveda, 2007. "Endogenous Fertility Policy and Unfunded Pensions," CAMA Working Papers 2007-06, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2007-06
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    File URL: https://crawford.anu.edu.au/sites/default/files/2026-06/6_Booth_Sepulveda_2007_0.pdf
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    References listed on IDEAS

    as
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    2. repec:bla:scandj:v:102:y:2000:i:3:p:523-45 is not listed on IDEAS
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    7. Sinn, Hans-Werner, 1997. "The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal For a Partial Transition to a Funded System," CEPR Discussion Papers 1734, Centre for Economic Policy Research.
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    Cited by:

    1. Borck, Rainald & Wrohlich, Katharina, 2011. "Preferences for childcare policies: Theory and evidence," European Journal of Political Economy, Elsevier, vol. 27(3), pages 436-454, September.

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    More about this item

    Keywords

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    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • 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
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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