A Model for Determining Consumption and Social Assistance Demand in Uncertainty Conditions

Paolo Melindi Ghidi ()
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Paolo Melindi Ghidi: Università degli Studi di Bologna

Rivista di Politica Economica, 2005, vol. 95, issue 6, 167-198

Abstract: This article focuses on the relation between demographic impact and social insurance and consists of two distinct yet closely related sections. The first section introduces a three overlapping generation model which tries to determine the ageing effects on the individual consumption and saving decisions in a partial equilibrium approach. The second section, instead, aims at providing a theory on the need to set up an ad hoc non self-sufficiency fund. It is shown that this mandatory and universal social insurance can guarantee a relatively higher ex-post individual welfare level when the individual fails to get insured and makes his decisions in uncertainty conditions, that is, reacting to risks in an imperfect way through the setting up of a precautionary saving fund.

JEL-codes: H55 J14 J22 (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:rpo:ripoec:v:95:y:2005:i:6:p:167-198

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