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The Elasticity of Intergenerational Substitution, Parental Altruism, and Fertility Choice

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  • Marla Ripoll

Abstract

Dynastic models common in macroeconomics use a single parameter to control the willingnessof individuals to substitute consumption both intertemporally, or across periods, and intergen-erationally, or across parents and their children. This paper defines the concept of elasticity ofintergenerational substitution (EGS), and extends a standard dynastic model in order to disen-tangle the EGS from the EIS, or elasticity of intertemporal substitution. A calibrated version ofthe model lends strong support to the notion that the EGS is significantly larger than one. Incontrast, estimates of the EIS suggests that it is at most one. What disciplines the identificationis the need to match empirically plausible fertility rates for the US.

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  • Marla Ripoll, 2018. "The Elasticity of Intergenerational Substitution, Parental Altruism, and Fertility Choice," Working Paper 6397, Department of Economics, University of Pittsburgh.
    • Handle: RePEc:pit:wpaper:6397
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    1. The Elasticity of Intergenerational Substitution, Parental Altruism, and Fertility Choice
      by Christian Zimmermann in NEP-DGE blog on 2018-10-24 03:12:53

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    Cited by:

    1. Doepke, M. & Tertilt, M., 2016. "Families in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1789-1891, Elsevier.
    2. Córdoba, Juan Carlos & Liu, Xiying & Ripoll, Marla, 2016. "Fertility, social mobility and long run inequality," Journal of Monetary Economics, Elsevier, vol. 77(C), pages 103-124.
    3. Musab Kurnaz & Mehmet Soytas, 2019. "Early Childhood Investment and Income Taxation," 2019 Meeting Papers 290, Society for Economic Dynamics.
    4. Juan Cordoba & Marla Ripoll & Xiying Liu, 2019. "Accounting for the International Quantity-Quality Trade-off," 2019 Meeting Papers 156, Society for Economic Dynamics.
    5. Cordoba, Juan Carlos, 2023. "Utilitarianism versus the Repugnant Conclusion," ISU General Staff Papers 202302241652330000, Iowa State University, Department of Economics.
    6. Cordoba, Juan Carlos & Liu, Xiying, 2018. "Efficiency with Endogenous Population and Fixed Resources," ISU General Staff Papers 201811010700001062, Iowa State University, Department of Economics.
    7. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    8. Marla Ripoll, 2021. "The Patterns of Parental Intervivos Transfers to Adult Children," Working Paper 7144, Department of Economics, University of Pittsburgh.
    9. Córdoba, Juan Carlos & Liu, Xiying & Ripoll, Marla, 2016. "Fertility, social mobility and long run inequality," Journal of Monetary Economics, Elsevier, vol. 77(C), pages 103-124.
    10. Ratbek Dzhumashev & Ainura Tursunalieva, 2023. "Social externalities, endogenous childcare costs, and fertility choice," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(1), pages 397-429, January.
    11. Juan Carlos Cordoba, 2015. "Children, Dynastic Altruism and the Wealth of Nations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(4), pages 774-791, October.
    12. Yang, Siqiang & Ripoll, Marla, 2023. "Financial transfers from parents to adult children," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 286-303.
    13. Cipriani, Giam Pietro & Fioroni, Tamara, 2023. "Human Capital and Pensions with Endogenous Fertility and Retirement," IZA Discussion Papers 16029, Institute of Labor Economics (IZA).
    14. Liu, Xiying, 2015. "Optimal population and policy implications," ISU General Staff Papers 201501010800005546, Iowa State University, Department of Economics.
    15. Juan Carlos Córdoba, 2023. "Utilitarianism versus the repugnant conclusion," Indian Economic Review, Springer, vol. 58(1), pages 163-180, July.
    16. Kim, Jaehong & Li, Mengling & Xu, Menghan, 2021. "Organ donation with vouchers," Journal of Economic Theory, Elsevier, vol. 191(C).
    17. Kurnaz, Musab & Soytas, Mehmet A., 2019. "Intergenerational Income Mobility and Income Taxation," GLO Discussion Paper Series 409, Global Labor Organization (GLO).

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    More about this item

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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