Education Subsidies and Endogenous Growth: Implications of Demographic Shocks
Frédéric Docquier () and
No 1994052, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
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: O41 J24 E62 (search for similar items in EconPapers)
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