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Insecure old-age security

Author

Listed:
  • M. Jellal

    (Groupe École Supérieure de Commerce de Toulouse - ESCT)

  • François-Charles Wolff

    (TEPP - Théorie et évaluation des politiques publiques - CNRS - Centre National de la Recherche Scientifique, LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université)

Abstract

In this paper, we examine the old‐age security hypothesis according to which parents rear children because they expect the latter to care for them in their later years. In developing countries where there are no perfect capital markets, children are usually viewed as a potential source of income and as a time‐related support in old age. However, investing in children remains risky. By focusing on uncertainty about the parental consumption during old age, we show that there exists a precautionary motive for the demand for children so that fertility of prudent parents is expected to increase.

Suggested Citation

  • M. Jellal & François-Charles Wolff, 2022. "Insecure old-age security," Post-Print hal-03913064, HAL.
    • Handle: RePEc:hal:journl:hal-03913064
    DOI: 10.1093/oep/54.4.636
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    Cited by:

    1. is not listed on IDEAS
    2. Jellal, Mohamed & Bouzahzah, Mohamed, 2012. "Social security family finance and demography," MPRA Paper 38804, University Library of Munich, Germany.
    3. Pal, Sarmistha, 2007. "Effects of Intergenerational Transfers on Elderly Coresidence with Adult Children: Evidence from Rural India," IZA Discussion Papers 2847, Institute of Labor Economics (IZA).
    4. Appelbaum, Elie & Katz, Eliakim, 1991. "The Demand for Children in the Absence of Capital and Risk Markets: A Portfolio Approach," Oxford Economic Papers, Oxford University Press, vol. 43(2), pages 292-304, April.
    5. Schäfer, Andreas & Valente, Simone, 2011. "Habit Formation, Dynastic Altruism, And Population Dynamics," Macroeconomic Dynamics, Cambridge University Press, vol. 15(3), pages 365-397, June.
    6. Sarmistha Pal, 2004. "Do Children Act As Old Age Security in Rural India? Evidence from an Analysis of Elderly Living Arrangements," Labor and Demography 0405002, University Library of Munich, Germany, revised 15 Oct 2004.
    7. Li, Carmen A & Olivera, Javier, 2005. "Participation in the Peruvian reformed pension system," Economics Discussion Papers 3618, University of Essex, Department of Economics.
    8. Carmen Li & Javier Olivera, 2009. "Cobertura y afiliación al sistema privado de pensiones del Perú," Capítulos de Libros PUCP / Chapters of PUCP books, in: Efraín Gonzales de Olarte & Javier M. Iguiñiz Echeverría (ed.), Desarrollo económico y bienestar. Homenaje a Máximo Vega-Centeno, edition 1, chapter 8, pages 221-239, Fondo Editorial - Pontificia Universidad Católica del Perú.
    9. Solveig Cunningham & Kathryn Yount & Michal Engelman & Emily Agree, 2013. "Returns on Lifetime Investments in Children in Egypt," Demography, Springer;Population Association of America (PAA), vol. 50(2), pages 699-724, April.
    10. Sarmistha Pal, 2006. "Elderly Health, Wealth and Coresidence with Adult Children in Rural India," Economics and Finance Discussion Papers 06-17, Economics and Finance Section, School of Social Sciences, Brunel University.

    More about this item

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D1 - Microeconomics - - Household Behavior

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