Education Subsidies and Endogenous Growth: Implications of Demographic Shocks

Frédéric Docquier and Philippe Michel

No 1994052, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In this paper we develop a three-period overlapping generations model in which individual decisions about education are the engine of growth. In this setting, it is first shown that an education subsidy combined with a hunJrsum redistribution from adults to retirees makes it possible to reach the optimum in a market context. Then we examine how these transfers should be adjusted in the presence of unexpected natality shocks. Especially, in the case of a " baby boom-baby bust" shock, the sharing of the shock burden requires increased transfers to retirees when the share of elderlies peaks.

JEL-codes: E62 J24 O41 (search for similar items in EconPapers)
Date: 1994-10-01
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1994052

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