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

Listed author(s):
  • Marla Ripoll

    (University of Pittsburgh)

  • Juan Cordoba

    (Iowa State University)

Dynastic models common in macroeconomics use a single parameter to control the willingness of individuals to substitute consumption both intertemporally, or across periods, and intergenerationally, or across parents and their children. This paper defines the concept of elasticity of intergenerational substitution (EGS), and extends a standard dynastic model in order to disentangle the EGS from the EIS, or elasticity of intertemporal substitution. A calibrated version of the model lends strong support to the notion that the EGS is significantly larger than one, and probably around 2.5. In contrast, estimates of the EIS suggests that it is lower than one. What disciplines the identification is the need to match empirically plausible fertility rates for the U.S.

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File URL: https://economicdynamics.org/meetpapers/2017/paper_428.pdf
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Paper provided by Society for Economic Dynamics in its series 2017 Meeting Papers with number 428.

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Date of creation: 2017
Handle: RePEc:red:sed017:428
Contact details of provider: Postal:
Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/
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  25. repec:reg:rpubli:282 is not listed on IDEAS
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