IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Endogenous Fertility, Endogenous Growth and Public Pension System: Should We Switch from a PAYG to a Fully-Funded System?

  • Yeopil Yoon
  • Gabriel Talmain

This paper studies the implications of state pension plan reform on fertility and on growth. It extends the Grossman and Yanagawa (1993) endogenous growth framework by incorporating altruism, making fertility endogenous. We investigate the effect on long-run growth of a switch from a Pay-As-You-Go (PAYG) pension system to a fully-funded system. We show that a PAYG pension system is associated with a lower fertility rate than a fully-funded system. This lower fertility in turn increases the rate of growth. Hence, switching from a PAYG system to a fully-funded system may be harmful, especially for developing countries in which limited resources are heavily stressed by high fertility rates. In addition, we propose a hypothetical pension system, the Saving Subsidy Program (SSP), which would yield a higher growth rate than the PAYG system. The SSP consists of a minimum benefit level for each retiree and of a subsidy to private savings.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.york.ac.uk/media/economics/documents/discussionpapers/2000/0031.pdf
Download Restriction: no

Paper provided by Department of Economics, University of York in its series Discussion Papers with number 00/31.

as
in new window

Length:
Date of creation:
Date of revision:
Handle: RePEc:yor:yorken:00/31
Contact details of provider: Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
Web page: http://www.york.ac.uk/economics/
Email:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Martin Feldstein & Andrew Samwick, 1998. "The Transition Path in Privatizing Social Security," NBER Chapters, in: Privatizing Social Security, pages 215-264 National Bureau of Economic Research, Inc.
  2. Gale, William G & Scholz, John Karl, 1994. "IRAs and Household Saving," American Economic Review, American Economic Association, vol. 84(5), pages 1233-60, December.
  3. Gale, W.G. & Scholtz, J.K., 1992. "IRAs and household saving," Discussion Paper 1992-44, Tilburg University, Center for Economic Research.
  4. 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.
  5. Keith Blackburn & Giam Pietro Cipriani, 1998. "Endogenous fertility, mortality and growth," Journal of Population Economics, Springer, vol. 11(4), pages 517-534.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:yor:yorken:00/31. 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: (Paul Hodgson)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.