Sustainability of social security in a model of endogenous fertility

Takashi Oshio, 隆士 小塩, タカシ オシオ, Masaya Yasuoka, 匡也 安岡 and タクヤ ヤスオカ

No 450, PIE/CIS Discussion Paper from Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University

Abstract: Social security tends to be unsustainable in nature in that it reduces individuals' demand for children as a measure to support their old age, which in turn undermines the financial base of social security. Using a simple overlapping-generations model with endogenous fertility and income transfer from children to parents, we discuss the maximum size of a pay-as-you-go social security program that can prevent a cumulative reduction of fertility and make the program sustainable. We also show that childcare allowance raises the maximum size of the program and raises an individual's lifetime utility.

Keywords: social security; fertility; intergenerational income transfer (search for similar items in EconPapers)
JEL-codes: H31 H55 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2009-08
New Economics Papers: this item is included in nep-age and nep-dge
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Persistent link: https://EconPapers.repec.org/RePEc:hit:piecis:450

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