A Perfect Marriage: Child-related Pensions and Public Education

Michael Voigtländer

No 02/2004, Otto-Wolff-Institut Discussion Paper Series from Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland

Abstract: In the present paper the effects of different pay-as-you-go pension systems on fertility decisions of a representative household are examined. Thereby, the analysis focuses especially on the interplay of parental quantity and quality decisions, introduced by Becker (1960). As it will be shown, a traditional pay-as-you-go system in either case distorts decisions of parents leading to an erosion of the financial basis of the system. In contrast, the assessment of a child-related pay-as-you-go system is ambiguous. If parents are solely responsible for expenditures on the quality of children, it is inefficient, too. However, if it is combined with a device like public education, optimality can be restored.

Keywords: Pay-as-you-go; child-related pension; quantity and quality of children (search for similar items in EconPapers)
JEL-codes: D10 H55 I20 (search for similar items in EconPapers)
Date: 2004-03
New Economics Papers: this item is included in nep-edu
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Citations: View citations in EconPapers (3)

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