The Role of Social Security in Household Decisions: VAR Estimates of Saving and Fertility Behaviour in Germany

Alessandro Cigno, Luca Casolaro () and Furio Rosati

CHILD Working Papers from CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY

Abstract: Estimating saving and fertility simultaneously by the VAR method, we find that social security cover has a positive effect on household saving, and a negative effect on fertility. In Germany, as in other countries where the hypothesis was tested,social security is thus good for growth. A possible explanation for this unconventional finding is that compulsory saving in the form of pension contributions tends to displace intra-family transfers, rather than asset formation. However, the negative effect of social security on fertility tends to erode the system’s own contributory base, because it reduces the number of future contributors. That is one of the reasons why, in Germany as elsewhere, pay-as-you-go pension systems tend to be financially unstable. To some extent, this is counteracted by child-related benefits, which tend to encourage fertility, but the effect appears to be weak.

Keywords: Social security; Household decision; VAR; saving; fertility; Germany (search for similar items in EconPapers)
JEL-codes: C10 D10 J10 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2001-07
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.child.carloalberto.org/images/wp/child7_2001.pdf (application/pdf)

Related works:
Working Paper: The Role of Social Security in Household Decisions: Var Estimates of Saving and Fertility Behaviour in Germany (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpc:wplist:wp07_01

Access Statistics for this paper

More papers in CHILD Working Papers from CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY Contact information at EDIRC.
Bibliographic data for series maintained by Giovanni Bert ().