On the Optimality of PAYG Pension Systems in an Endogenous Fertility Setting

Gemma Abio, Géraldine Mahieu and Concepció Patxot
Additional contact information
Géraldine Mahieu: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 2002006, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In order to help in designing an accurate pension reform, we determine the optimal resource allocation in an endogenous fertility model generating a demographic transition. Extending Samuelson’s (1975) work in such a setting, we analyze the problem of the interiority of the optimal solution and discuss the serendipity theorem. We then characterize the decentralization of the first best, showing that a pension policy linking pension benefits to the number of children constitutes an optimal social security program able to restore both the optimal capital stock and the optimal rate of pupulation growth as a unique instrument. We also show that neither a Beveridgean pension scheme nor a Bismarckian one can decentralize the first best.

Keywords: demographic transition; fertility; pensions; golden rule (search for similar items in EconPapers)
JEL-codes: E62 H55 J13 J18 (search for similar items in EconPapers)
Pages: 35
Date: 2002-02-01
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://sites.uclouvain.be/econ/DP/IRES/2002-6.pdf (application/pdf)

Related works:
Journal Article: On the optimality of PAYG pension systems in an endogenous fertility setting (2004)
Working Paper: On the Optimality of PAYG Pension Systems in an Endogenous Fertility Setting (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2002006

Access Statistics for this paper

More papers in LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Virginie LEBLANC ().