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Millian Efficiency with Endogenous Fertility

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  • J. Ignacio Conde-Ruiz
  • Eduardo L. Giménez
  • Mikel Pérez-Nievas

Abstract

This paper studies an extension of the notion of Pareto eciency, referred to as Millian eciency, to evaluate the performance of symmetric allocations in an overlapping generations setting with endogenous fertility. The criterium of Pareto dominance underlying the notion of Millian eciency is based exclusively on preferences of those agents who are actually born, and allows only for welfare comparisons of symmetric allocations (i.e, allocations in which all living individuals of the same generation take the same decisions). The main contributions of the paper are the following. First, we provide necessary (static) and sucient (dynamic) conditions to determine whether an allocation is Millian ecient or not, and we show that the sucient conditions for dynamic eciency oered by Cass (1972) and Balasko and Shell (1980) cannot be straightforward applied when fertility is endogenous. Second, we extend the two Fundamental Theorems of Welfare Economics to a framework with endogenous population by characterizing Millian ecient allocations as the equilibria of a decentralized price mechanism. Finally, we discuss alternative extensions of the Pareto criterium that strengthen the Millian notion.

Suggested Citation

  • J. Ignacio Conde-Ruiz & Eduardo L. Giménez & Mikel Pérez-Nievas, "undated". "Millian Efficiency with Endogenous Fertility," Working Papers 2004-13, FEDEA.
  • Handle: RePEc:fda:fdaddt:2004-13
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    References listed on IDEAS

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    Cited by:

    1. Ishida, Ryo & Oguro, Kazumasa & Takahata, Junichiro, 2015. "Child benefit and fiscal burden in the endogenous fertility setting," Economic Modelling, Elsevier, vol. 44(C), pages 252-265.
    2. Wang, Ruixin, 2015. "Essays on development economics and public economics," Other publications TiSEM e1779514-5b71-4726-925b-2, Tilburg University, School of Economics and Management.
    3. Thomas Baudin, 2011. "Family Policies: What Does the Standard Endogenous Fertility Model Tell Us?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(4), pages 555-593, August.
    4. Gregory Ponthiere, 2016. "Utilitarian population ethics and births timing," Journal of Economics, Springer, vol. 117(3), pages 189-238, April.
    5. Boucekkine, R. & Fabbri, G. & Gozzi, F., 2014. "Egalitarianism under population change: Age structure does matter," Journal of Mathematical Economics, Elsevier, vol. 55(C), pages 86-100.
    6. Mikhail Golosov & Larry E. Jones & Michèle Tertilt, 2007. "Efficiency with Endogenous Population Growth," Econometrica, Econometric Society, vol. 75(4), pages 1039-1071, July.
    7. Mehdi Senouci, 2013. "Direction of technical change, endogenous fertility, and patterns of growth," Working Papers hal-01206021, HAL.
    8. Simon Sosvilla-Rivero & Pedro Rodriguez, 2010. "Linkages in international stock markets: evidence from a classification procedure," Applied Economics, Taylor & Francis Journals, vol. 42(16), pages 2081-2089.
    9. Schoonbroodt, Alice & Tertilt, Michèle, 2010. "Who Owns Children and Does it Matter?," CEPR Discussion Papers 7653, C.E.P.R. Discussion Papers.
    10. Philippe Michel & Bertrand Wigniolle, 2009. "Pareto-Efficiency and Endogenous Fertility: A Simple Model," Mathematical Population Studies, Taylor & Francis Journals, vol. 16(1), pages 36-59.
    11. Li, Bei & Zhang, Jie, 2015. "Efficient education subsidization and the pay-as-you-use principle," Journal of Public Economics, Elsevier, vol. 129(C), pages 41-50.
    12. Schoonbroodt, Alice & Tertilt, Michèle, 2014. "Property rights and efficiency in OLG models with endogenous fertility," Journal of Economic Theory, Elsevier, vol. 150(C), pages 551-582.
    13. Fanti, Luciano & Gori, Luca, 2012. "PAYG pensions, tax-cum-subsidy and A-Pareto efficiency," Research in Economics, Elsevier, vol. 66(1), pages 65-71.
    14. repec:spr:jopoec:v:31:y:2018:i:1:d:10.1007_s00148-017-0665-9 is not listed on IDEAS
    15. Raouf Boucekkine & Giorgio Fabbri & Fausto Gozzi, 2012. "Egalitarism under Population Change. The Role of Growth and Lifetime Span," AMSE Working Papers 1211, Aix-Marseille School of Economics, Marseille, France.
    16. repec:the:publsh:2138 is not listed on IDEAS
    17. Pérez-Nievas, Mikel & Conde-Ruiz, José I. & Giménez, Eduardo L., 0. "Efficiency and endogenous fertility," Theoretical Economics, Econometric Society.
    18. Oliwia Komada, 2015. "Children as a public good in PAYG pension system," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 43.
    19. Wei-bin Zhang, 2011. "Elastic Labour Supply and Home Production in a Monetary Growth Model," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 9(2), pages 87-100.
    20. repec:eur:ejesjr:64 is not listed on IDEAS
    21. 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.

    More about this item

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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