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Education Subsidies and Endogenous Growth : Implications of Demographic Shocks

Author

Listed:
  • DOCQUIER, Frédéric

    (Service des Etudes et de la Statistique, Ministere de la Region Wallonne, Namur)

  • MICHEL, Philippe

    (L.E.Q.A.M., Université d’Aix-Marseille II, France)

Abstract

In this paper we develop a three-period overlapping generations model in which individual decisions about education are the engine of growth. In this setting, it is first shown that an education subsidy combined with a hunJrsum redistribution from adults to retirees makes it possible to reach the optimum in a market context. Then we examine how these transfers should be adjusted in the presence of unexpected natality shocks. Especially, in the case of a " baby boom-baby bust" shock, the sharing of the shock burden requires increased transfers to retirees when the share of elderlies peaks.

Suggested Citation

  • DOCQUIER, Frédéric & MICHEL, Philippe, 1994. "Education Subsidies and Endogenous Growth : Implications of Demographic Shocks," LIDAM Discussion Papers CORE 1994052, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1994052
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp1994.html
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    Citations

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    Cited by:

    1. Bouzahzah, Mohamed & De la Croix, David & Docquier, Frederic, 2002. "Policy reforms and growth in computable OLG economies," Journal of Economic Dynamics and Control, Elsevier, vol. 26(12), pages 2093-2113, October.
    2. David Croix & Philippe Michel, 2007. "Education and growth with endogenous debt constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(3), pages 509-530, December.
    3. Docquier, Frederic & Paddison, Oliver, 2003. "Social security benefit rules, growth and inequality," Journal of Macroeconomics, Elsevier, vol. 25(1), pages 47-71, March.
    4. DOCQUIER, Frédéric & PADDISON, Oliver, 2000. "Growth and equality effects of pension plans," LIDAM Discussion Papers CORE 2000036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    More about this item

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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