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Fertility and PAYG pensions in the overlapping generations model

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  • Fanti, Luciano
  • Gori, Luca

Abstract

This article analyses how long-run pay-as-you-go public pensions react to a change in fertility in the basic overlapping generations model of neoclassical growth. While it would seem well established both in the academic and political debates that the decline in fertility represents a “demographic time bomb” for the sustainability of public pensions, it is shown that a falling birth rate need not necessarily cause long-run pension benefit to fall.

Suggested Citation

  • Fanti, Luciano & Gori, Luca, 2010. "Fertility and PAYG pensions in the overlapping generations model," MPRA Paper 25811, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:25811
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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