From Malthusian to Modern fertility: When intergenerational transfers matter

Luca Spataro and Luciano Fanti

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: In a standard OLG model of a small open economy with logarithmic utility and endogenous fertility we show that the reversion of the relationship between fertility and wages (i.e. a transition from the Malthusian to the Modern fertility behaviour) may be possible in presence of intergenerational public transfers(i.e. public national debt or PAYG pensions). In fact, as known, the latter have been implemented mostly in the advanced Western Countries, where the fertility behavior reversion has mainly occurred. We show that such a reversion is more likely to occur in economies that are entailed with low interest rate, low costs for raising children and low degree of patience, and high preference for children.

Keywords: overlapping generations; endogenous fertility; savings; small open economy; public national debt; PAYG pension scheme; demographic transition. (search for similar items in EconPapers)
JEL-codes: D91 E62 H63 J13 (search for similar items in EconPapers)
Date: 2013-05-01
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge and nep-evo
Note: ISSN 2039-1854
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2013/163

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