Fertility and Social Security
The data show that an increase in government provided old-age pensions is strongly correlated with a reduction in fertility. What type of model is consistent with this finding? We explore this question using two models of fertility, the one by Barro and Becker (1989), and the one inspired by Caldwell and developed by Boldrin and Jones (2002). In the Barro and Becker model parents have children because they perceive their children's lives as a continuation of their own. In the Boldrin and Jones' framework parents procreate because the children care about their old parents' utility, and thus provide them with old age transfers. The effect of increases in government provided pensions on fertility in the Barro and Becker model is very small, and inconsistent with the empirical findings. The effect on fertility in the Boldrin and Jones model is sizeable and accounts for between 55 and 65% of the observed Europe-US fertility differences both across countries and across time and over 80% of the observed variation seen in a broad cross-section of countries. Another key factor affecting fertility the Boldrin and Jones model is the access to capital markets, which can account for the other half of the observed change in fertility in developed countries over the last 70 years.
|Date of creation:||Feb 2005|
|Date of revision:|
|Note:||AG EFG PE|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Veall, Michael R., 1986. "Public pensions as optimal social contracts," Journal of Public Economics, Elsevier, vol. 31(2), pages 237-251, November.
- Barro, R.J. & Becker, G.S., 1988.
"Fertility Choice In A Model Of Economic Growth,"
University of Chicago - Economics Research Center
88-8, Chicago - Economics Research Center.
- Robert J. Barro & Gary S. Becker, . "Fertility Choice in a Model of Economic Growth," University of Chicago - Population Research Center 88-8, Chicago - Population Research Center.
- Rosati, Furio Camillo, 1996. "Social security in a non-altruistic model with uncertainty and endogenous fertility," Journal of Public Economics, Elsevier, vol. 60(2), pages 283-294, May.
- Akira Yakita, 2001. "Uncertain lifetime, fertility and social security," Journal of Population Economics, Springer, vol. 14(4), pages 635-640.
- Jie Zhang, 2001. "Long-Run Implications of Social Security Taxation for Growth and Fertility," Southern Economic Journal, Southern Economic Association, vol. 67(3), pages 713-724, January.
- 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.
- Courtney Coile & Jonathan Gruber, 2000. "Social Security and Retirement," NBER Working Papers 7830, National Bureau of Economic Research, Inc.
- Cristina Echevarria & Antonio Merlo, 1995.
"Gender differences in education in a dynamic household bargaining model,"
195, Federal Reserve Bank of Minneapolis.
- Echevarria, Cristina & Merlo, Antonio, 1999. "Gender Differences in Education in a Dynamic Household Bargaining Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(2), pages 265-86, May.
- Antonio Merlo & Cristina Echevarria, 1997. "Gender differences in education in a dynamic household bargaining model," Working Papers. Serie AD 1997-25, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- 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.
- Nishimura, K. & Zhang, J., 1990. "Pay-As-You-Go Public Pensions With Endogenous Fertility," Papers 202, Australian National University - Department of Economics.
- Cigno, Alessandro & Rosati, Furio Camillo, 1992. "The Effects of Financial Markets and Social Security on Saving and Fertility Behaviour in Italy," Journal of Population Economics, Springer, vol. 5(4), pages 319-41.
- Prinz, Aloys, 1990. "Endogenous Fertility, Altruistic Behavior across Generations, and Social Security Systems," Journal of Population Economics, Springer, vol. 3(3), pages 179-92, October.
- Bental, Benjamin, 1989. "The Old Age Security Hypothesis and Optimal Population Growth," Journal of Population Economics, Springer, vol. 1(4), pages 285-301.
- Charles Hohm, 1975. "Social security and fertility: An international perspective," Demography, Springer, vol. 12(4), pages 629-644, November.
- Jeremy Greenwood & Ananth Seshadri & Guillaume Vandenbroucke, 2005.
"The Baby Boom and Baby Bust,"
American Economic Review,
American Economic Association, vol. 95(1), pages 183-207, March.
- Fernando Garcia & Jorge Oliveira Pires, 2004.
"Productivity of Nations: a stochastic frontier approach to TFP decomposition,"
Econometric Society 2004 Latin American Meetings
292, Econometric Society.
- Pires, Jorge O. & Garcia, Fernando, 2004. "Productivity of Nations: a Stochastic Frontier Approach to Tfp Decomposition," Textos para discussão 143, Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
- 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.
- Megumi Mochida, 2005. "Child Allowances, Fertility, and Uncertain Lifetime," Discussion Papers in Economics and Business 05-11, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
- Isaac Ehrlich & Jinyoung Kim, 2005. "Social Security, Demographic Trends, and Economic Growth: Theory and Evidence from the International Experience," NBER Working Papers 11121, National Bureau of Economic Research, Inc.
- Alícia Adserà, 2004. "Changing fertility rates in developed countries. The impact of labor market institutions," Journal of Population Economics, Springer, vol. 17(1), pages 17-43, February.
- Zhang, Junsen & Zhang, Jie & Lee, Ronald, 2001. "Mortality decline and long-run economic growth," Journal of Public Economics, Elsevier, vol. 80(3), pages 485-507, June.
- Juster, F. Thomas & Stafford, Frank P., 1990.
"The Allocation of Time: Empirical Findings, Behavioural Models, and Problems of Measurement,"
Working Paper Series
258, Research Institute of Industrial Economics.
- Juster, F Thomas & Stafford, Frank P, 1991. "The Allocation of Time: Empirical Findings, Behavioral Models, and Problems of Measurement," Journal of Economic Literature, American Economic Association, vol. 29(2), pages 471-522, June.
- Maddison, Angus, 1994. "Standardised Estimates of Fixed Capital Stock: A Six Country Comparison," GGDC Research Memorandum 199409, Groningen Growth and Development Centre, University of Groningen.
- Karine S. Moe, 1998. "Fertility, Time Use, and Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 699-718, July.
- Yeopil Yoon & Gabriel Talmain, . "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.
- McGrattan, Ellen R & Rogerson, Richard & Wright, Randall, 1997.
"An Equilibrium Model of the Business Cycle with Household Production and Fiscal Policy,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 267-90, May.
- Ellen McGrattan & Richard Rogerson & Randall Wright, 1995. "An equilibrium model of the business cycle with household production and fiscal policy," Staff Report 191, Federal Reserve Bank of Minneapolis.
- Michele Boldrin & Larry E. Jones, 2002. "Mortality, Fertility, and Saving in a Malthusian Economy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 775-814, October.
- Berthold U. Wigger, 1999. "Pay-as-you-go financed public pensions in a model of endogenous growth and fertility," Journal of Population Economics, Springer, vol. 12(4), pages 625-640.
- Yoon, Yeopil & Talmain, Gabriel, 2001. "Endogenous Fertility, Endogenous Growth and Public Pension System: Should We Switch from a Pay-As-You-Go to a Fully Funded System?," Manchester School, University of Manchester, vol. 69(5), pages 586-605, Special I.
- Ehrlich, Isaac & Lui, Francis T, 1998. "Social Security, the Family, and Economic Growth," Economic Inquiry, Western Economic Association International, vol. 36(3), pages 390-409, July.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:11146. 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: ()
If references are entirely missing, you can add them using this form.