The Cost of Risk Sharing: The Effects of Savings Subsidization and Longevity on Gifts, Fertility and Savings

Brian Dollery Chong Mun Ho and Qing Bin Liu
Authors registered in the RePEc Author Service: Chong Mun Ho () and Brian Edward Dollery ()

The IUP Journal of Public Finance, 2008, vol. VI, issue 3, 49-59

Abstract: Like many advanced nations, Malaysia is undergoing profound demographic changes that are bound to have far-reaching economic and social repercussions in future. A critical feature of future Malaysian society will be the need to provide economic security to older people. Thus, it is important that policy makers consider the various options available to meet this need. While some progress has already been made, including the introduction of the National Policy for Older Persons in 1995, much remains to be done. The present paper seeks to contribute to the literature on demographic policy formulation in Malaysia by considering the characteristics of potential public pension schemes, that could assist in providing economic security to older Malaysians. In this paper, we undertake a conceptual simulation exercise on a subsidized public pension scheme which embodies an old age subsidy in order to establish how it will affect intergenerational transfers from child to parent (i.e., gifts), savings and fertility in an overlapping generation economy model with and without annuity markets.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjpf:v:06:y:2008:i:3:p:49-59

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