Social Security, Child Allowances, and Endogenous Fertility

Takashi Oshio, 隆士 小塩 and タカシ オシオ

No 171, Discussion Paper from Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University

Abstract: Based on a simple overlapping generations model with endogenous fertility, we show that the effectiveness of social security reform and childcare support depends much on the openness of the economy, altruism, and initial fertility. For example, introducing a child allowance, which is often expected to mitigate demographic pressures, might be ineffective in a closed economy. Downsizing a social security system, even with new taxes required to compensate for existing pension liabilities, could be welfare-improving in a closed economy. Altruistic bequests tend to offset intergenerational income transfer caused by policy changes, but a higher level of initial fertility makes the outcome indeterminate.

JEL-codes: H31 H55 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2003-09
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Persistent link: https://EconPapers.repec.org/RePEc:hit:piedp1:171

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