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How a Pay-As-You-Go Pension System Can Lead To a Pareto Improvement in an OLG Model with Endogenous Fertility

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  • Peter J. Stauvermann

    (Changwon National University, Department of Economics, Republic of Korea)

Abstract

Mostly, all developed countries have the problem that the total fertility rate is below its sustainable level. Therefore, all these countries face economic problems caused by a demographic change. In this paper, we show that given certain conditions a pay-as-you-go pension system where the pension depends only on the number of own children leads to a Pareto improvement and to an increase of the total fertility rate. To show this we use an Overlapping Generation model with endogenous fertility in a small open economy.

Suggested Citation

  • Peter J. Stauvermann, 2013. "How a Pay-As-You-Go Pension System Can Lead To a Pareto Improvement in an OLG Model with Endogenous Fertility," Economic Research Guardian, Weissberg Publishing, vol. 3(1), pages 61-69, June.
    • Handle: RePEc:wei:journl:v:3:y:2013:i:1:p:61-69
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    References listed on IDEAS

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    More about this item

    Keywords

    Endogenous fertility; Pay-as-you-go pension system; OLG model;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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