Maximum size of social security in a model of endogenous fertility

Takashi Oshio () and Masaya Yasuoka
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Takashi Oshio: Hitotsubashi University

Economics Bulletin, 2009, vol. 29, issue 2, 644-654

Abstract: Social security tends to be unsustainable in nature. It reduces individuals'' demand for children as a measure to support their lifestyle during old age, which in turn undermines the financial basis 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 a program sustainable. We also show that a child-care 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: H3 H5 (search for similar items in EconPapers)
Date: 2009-04-25
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Citations: View citations in EconPapers (10)

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