Are Family Allowances and Fertility-related pensions Siamese Twins?

Robert Fenge and Volker Meier

No 1157, CESifo Working Paper Series from CESifo

Abstract: This paper discusses alternative ways to deal with the positive externalities of having children in a pay-as-you-go pension system. Family allowances are compared to introducing a fertility-related component into the pension formula. In an endogenous labor supply setting, both instruments are shown to be equivalent if general pensions are of the Bismarckian contribution-related type. In contrast, if general pensions are of the Beveridgean flat-rate type, making pensions contingent on the number of children is generally preferable to family allowances because the latter creates a larger tax load on labor supply.

Keywords: pay-as-you-go pension; child benefits; fertility; externalities (search for similar items in EconPapers)
JEL-codes: H23 H55 J13 J18 (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Working Paper: Are Family Allowances And Fertility-Related Pensions Siamese Twins? (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1157

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