Pensions with Heterogenous Individuals and Endogenous Fertility

Helmuth Cremer, Firouz Gahvari and Pierre Pestieau
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Firouz Gahvari: UIUC - University of Illinois at Urbana-Champaign [Urbana] - University of Illinois System
Pierre Pestieau: CREPP - Center of Research in Public Economics and Population Economics - ULiège - Université de Liège = University of Liège = Universiteit van Luik = Universität Lüttich

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Abstract: We study the design of pension schemes when fertility is endogenous and parents differ in ability to raise children. Pay-as-you-go schemes require, under perfect information, a marginal subsidy on fertility to correct for the externality they create, equal pensions, and contributions that increase or decrease with the number of children. Under asymmetric information, incentive-related distortions supplement the Pigouvian subsidy. These require an additional subsidy or an offsetting tax depending on whether the redistribution is towards people with more or with less children. In the former case, pensions are decreasing in the number of children; otherwise, they are increasing.

Keywords: Pay-as-you-go social security; Endogenous fertility; Redistribution (search for similar items in EconPapers)
Date: 2006-11
Note: View the original document on HAL open archive server: https://hal.science/hal-05104981v1
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Published in Journal of Population Economics, 2006, 21 (4), pp.961-981. ⟨10.1007/s00148-006-0114-7⟩

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Related works:
Journal Article: Pensions with heterogenous individuals and endogenous fertility (2008)
Working Paper: Pensions with heterogenous individuals and endogenous fertility (2006)
Working Paper: Pensions with Heterogenous Individuals and Endogenous Fertility (2006)
Working Paper: Pensions with Heterogenous Individuals and Endogenous Fertility (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05104981

DOI: 10.1007/s00148-006-0114-7

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