On the Implications of Two-Sided Altruism in Human Capital Based OLG Model
Asian Journal of Law and Economics, 2011, vol. 2, issue 2, pages 1-40
This article summarizes some propositions regarding economic dynamics and implications of two-sided altruism, on the basis of the human-capital-based OLG model of Ehrlich and Lui (1991), with application of a modified, fertility-endogenized definition of linearly separable two-sided altruism by Abel (1987) and Altig and Davis (1993). Some properties in both transition processes and steady states, the effects of unfunded social security on an equilibrium path, and the implications in the context of so called the Samaritans dilemma and the Recardian equivalence are also analyzed. Finally some policy implications are summarized. Our calibration results and analyses show that (1) the combination of altruism toward parents and children is crucial for determining a threshold level of initial human capital and education technology in a transition process (stagnant to growth or growth to stagnant) with an irreversible hysteresis aspect, (2) a regular recursive induction approach might still cause inefficiency in terms of an ex-post Pareto optimality criterion as of two periods later, even if strategic effects for after children (two generations later) are appropriately taken account of, and (3) unfunded social security, which involves actuarially fair insurance as well as certainty premium transfer, might not affect either saving or critical values for regime change so drastically.
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
https://www.degruyter.com/view/j/ajle.2011.2.2/ajl ... .1009.xml?format=INT (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bpj:ajlecn:v:2:y:2011:i:2:n:1
Ordering information: This journal article can be ordered from
Access Statistics for this article
Asian Journal of Law and Economics is currently edited by Noriyuki Yanagawa
More articles in Asian Journal of Law and Economics from De Gruyter
Series data maintained by Peter Golla ().