Intergenerational Transfers and Demographic Transition

Keith Blackburn and Giam Pietro Cipriani

Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester

Abstract: This paper presents an analysis of demographic transition based on the endogenous evolution of intergenerational transfers along an economy's endogenous path of development. Two-period-lived agents belonging to overlapping generations choose optimally their desired levels of consumption and fertility, together with their desired sizes of transfers to both parents and children. Parents are more efficient than children in producing output, but some parental time must be devoted to child-rearing. At low levels of development, fertility is high and the flow of net intergenerational transfers is from the young to the old. At high levels of development, fertility is low and the flow of net transfers is from the old to the young. These results accord strongly with empirical observations and the analysis may be seen as formalising, for the first time, a long-standing and well-respected hypothesis in the demographic transition literature.

Pages: 29 pages
Date: 2002
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Related works:
Journal Article: Intergenerational transfers and demographic transition (2005)
Working Paper: Intergenerational Transfers and Demographic Transition (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:man:cgbcrp:14

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