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The Elasticity of Intergenerational Substitution, Parental Altruism, and Fertility Choice

Marla Ripoll () and Juan Cordoba ()

No 428, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: Dynastic models common in macroeconomics use a single parameter to control the willingness of individuals to substitute consumption both intertemporally, or across periods, and intergenerationally, or across parents and their children. This paper defines the concept of elasticity of intergenerational substitution (EGS), and extends a standard dynastic model in order to disentangle the EGS from the EIS, or elasticity of intertemporal substitution. A calibrated version of the model lends strong support to the notion that the EGS is significantly larger than one, and probably around 2.5. In contrast, estimates of the EIS suggests that it is lower than one. What disciplines the identification is the need to match empirically plausible fertility rates for the U.S.

New Economics Papers: this item is included in nep-dge
Date: 2017
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Related works:
Working Paper: The Elasticity of Intergenerational Substitution, Parental Altruism, and Fertility Choice (2014) Downloads
Working Paper: The Elasticity of Intergenerational Substitution, Parental Altruism, and Fertility Choice (2014) Downloads
Working Paper: The Elasticity of Intergenerational Substitution, Parental Altruism, and Fertility Choice (2014) Downloads
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