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Social Security, Child Allowances, and Endogenous Fertility

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  • Oshio, Takashi
  • 小塩, 隆士
  • オシオ, タカシ

Abstract

Based on a simple overlapping generations model with endogenous fertility, we show that the effectiveness of social security reform and childcare support depends much on the openness of the economy, altruism, and initial fertility. For example, introducing a child allowance, which is often expected to mitigate demographic pressures, might be ineffective in a closed economy. Downsizing a social security system, even with new taxes required to compensate for existing pension liabilities, could be welfare-improving in a closed economy. Altruistic bequests tend to offset intergenerational income transfer caused by policy changes, but a higher level of initial fertility makes the outcome indeterminate.

Suggested Citation

  • Oshio, Takashi & 小塩, 隆士 & オシオ, タカシ, 2003. "Social Security, Child Allowances, and Endogenous Fertility," Discussion Paper 171, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:piedp1:171
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    References listed on IDEAS

    as
    1. Cigno, Alessandro & Luporini, Annalisa & Pettini, Anna, 2003. "Transfers to families with children as a principal-agent problem," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1165-1177, May.
    2. Alessandro Cigno & Luca Casolaro & Furio C. Rosati, 2000. "The Role of Social Security in Household Decisions: Var Estimates of Saving and Fertility Behaviour in Germany," CESifo Working Paper Series 394, CESifo.
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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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