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Savings, Child Support, Pensions and Endogenous (and Heterogeneous) Fertility

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  • Andras Simonovits

    (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences also Mathematical Institute, Budapest University of Technology, and Department of Economics, CEU)

Abstract

van Groezen, Leers and Meijdam (2003) (for short, GLM) analyzed combination of public pension and child support in an OLG model. We impose credit constraint on workers, and extend GLM's analysis from the case where workers do not understand the cost also to the case where they do. GLM's infinite stream of generations is simplified into three generations but heterogeneity of rearing costs and of enjoying children is introduced. Two major results: (i) excluding negative savings, fertility decreases with pension contributions and increases with taxes; (ii) the introduction of fertility-dependent pensions may strengthen heterogeneity in fertility.

Suggested Citation

  • Andras Simonovits, 2013. "Savings, Child Support, Pensions and Endogenous (and Heterogeneous) Fertility," CERS-IE WORKING PAPERS 1335, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:1335
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    References listed on IDEAS

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    1. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 1999. "Social Norms and Economic Incentives in the Welfare State," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 1-35.
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    3. Helmuth Cremer & Firouz Gahvari & Pierre Pestieau, 2008. "Pensions with heterogenous individuals and endogenous fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 21(4), pages 961-981, October.
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    5. Eckstein, Zvi & Wolpin, Kenneth I., 1985. "Endogenous fertility and optimal population size," Journal of Public Economics, Elsevier, vol. 27(1), pages 93-106, June.
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    7. van Groezen, Bas & Leers, Theo & Meijdam, Lex, 2003. "Social security and endogenous fertility: pensions and child allowances as siamese twins," Journal of Public Economics, Elsevier, vol. 87(2), pages 233-251, February.
    8. Barr, Nicholas & Diamond, Peter, 2008. "Reforming Pensions: Principles and Policy Choices," OUP Catalogue, Oxford University Press, number 9780195311303.
    9. Antonio Rangel, 2003. "Forward and Backward Intergenerational Goods: Why Is Social Security Good for the Environment?," American Economic Review, American Economic Association, vol. 93(3), pages 813-834, June.
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    Citations

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    Cited by:

    1. Andras Simonovits, 2015. "Optimal Child-Related Transfers with Endogenous Fertility," CERS-IE WORKING PAPERS 1514, Institute of Economics, Centre for Economic and Regional Studies.
    2. Andras Simonovits, 2015. "Optimal Child-Related Transfers and Personal Income Tax with Endogenous Fertility," CERS-IE WORKING PAPERS 1524, Institute of Economics, Centre for Economic and Regional Studies.
    3. Andras Simonovits, 2015. "Socially Optimal Child-Related Transfers and Personal Income Tax with Endogenous Fertility," CERS-IE WORKING PAPERS 1537, Institute of Economics, Centre for Economic and Regional Studies.
    4. Simonovits Andras, 2017. "Jumping the welfare gap in designing public transfers," CERS-IE WORKING PAPERS 1707, Institute of Economics, Centre for Economic and Regional Studies.
    5. Andras Simonovits, 2014. "Optimal Child Allowances with Heterogeneous Fertilities," CERS-IE WORKING PAPERS 1401, Institute of Economics, Centre for Economic and Regional Studies.

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    More about this item

    Keywords

    Child support; Endogenous fertility; Overlapping generations; Pensions;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • 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
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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