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Old-age Support and Demographic Transition in Developing Countries. A Cultural Transmission Model

  • Javier Olivera

    (UCD Geary Institute, University College Dublin)

We model intergenerational old-age support within the context of a developing country that faces demographic transition: declining fertility and increasing life expectancy. We attempt to answer if agents will be able to support their parents during the next generations and under what conditions. For this purpose we use a three period overlapping generations model and a cultural transmission process, in which agents may be socialized to different cultural family models (old-age supporters and non-supporters). As life expectancy increases, we find conditions under which a reduced fertility rate is compatible with the expectation to be supported during old-age. This offers an additional explanation for the persistency of family old-age support in developing countries facing demographic transsition.

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File URL: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201307.pdf
File Function: First version, 2013
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Paper provided by Geary Institute, University College Dublin in its series Working Papers with number 201307.

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Length: 36 pages
Date of creation: 09 May 2013
Date of revision:
Handle: RePEc:ucd:wpaper:201307
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  1. Lau, Sau-Him Paul, 2009. "Demographic structure and capital accumulation: A quantitative assessment," Journal of Economic Dynamics and Control, Elsevier, vol. 33(3), pages 554-567, March.
  2. Donald Cox & Oded Stark, 2007. "On the Demand for Grandchildren: Tied Transfers and the Demonstration Effect," Chapters, in: Handbook on the Economics of Happiness, chapter 18 Edward Elgar.
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  8. K Blackburn & G P Cipriani, 2002. "Intergenerational Transfers and Demographic Transition," Centre for Growth and Business Cycle Research Discussion Paper Series 14, Economics, The Univeristy of Manchester.
  9. 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.
  10. Alberto Bisin & Giorgio Topa & Thierry Verdier, 2009. "Cultural transmission, socialization and the population dynamics of multiple-trait distributions," Post-Print halshs-00754392, HAL.
  11. Bisin, A. & Verdier, T., 1997. "The Economics of Cultural Transmission and the Dynamics of Preferences," DELTA Working Papers 97-03, DELTA (Ecole normale supérieure).
  12. Dahan, M & Tsiddon, D, 1996. "Demographic Transition, Income Distribution and Economic Growth," Papers 42-96, Tel Aviv - the Sackler Institute of Economic Studies.
  13. Thomas Baudin, 2007. "A Role for Cultural Transmission in Fertility Transitions," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00159595, HAL.
  14. Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," NBER Working Papers 16512, National Bureau of Economic Research, Inc.
  15. Willis, Robert J, 1973. "A New Approach to the Economic Theory of Fertility Behavior," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S14-64, Part II, .
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