Pension and the Family

Mizuki Komura and Hikaru Ogawa

No 8479, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The effects of pension policies on fertility have been examined in the overlapping generations (OLG) model of unitary household in which no heterogeneity exists between the wife and the husband. This paper departs from the OLG model and focuses on the marital bargaining arising from the heterogeneity in a couple in a non-unitary model. Specifically, this paper examines how the pension policy affects the endogenous fertility of a bargaining couple who have different lifespans. The analysis finds out a new channel of pension policy on fertility decisions: an increase in pension size affects fertility not only via the changes in current and future income, but through a change in marital bargaining power. This channel leads a plausible argument that an increase in a pay-as-you-go (PAYG) pension further accelerates a decline in fertility through the empowerment of women.

Keywords: marital bargaining; longevity; fertility; pension (search for similar items in EconPapers)
JEL-codes: H55 J12 J13 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2014-09
New Economics Papers: this item is included in nep-age, nep-dge and nep-gro
References: View references in EconPapers View complete reference list from CitEc
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Published - published as 'Pay-as-you-go pension, bargaining power, and fertility' in: FinanzArchiv/Public Finance Analysis, 2018, 74 (2), 235 - 259

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