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Human Capital and Pensions with Endogenous Fertility and Retirement

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  • Cipriani, Giam Pietro

    (University of Verona)

  • Fioroni, Tamara

    (University of Verona)

Abstract

We study an OLG model with child policies and a PAYG pension with endogenous retirement and fertility. The result of the planned economy is compared to the decentralized competitive equilibrium deriving optimal policies. We show that in the presence of a PAYG pension system, the optimal policy mix includes an education subsidy and a subsidy for the supply of labor in old age. Fertility should be taxed or incentivized depending on whether there is full or partial retirement, and on the parameters. We focus on the parameter reflecting the deterioration of human capital and show that a child tax may be required.

Suggested Citation

  • Cipriani, Giam Pietro & Fioroni, Tamara, 2023. "Human Capital and Pensions with Endogenous Fertility and Retirement," IZA Discussion Papers 16029, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16029
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    More about this item

    Keywords

    PAYG pensions; endogenous fertility; endogenous retirement; social security; education subsidies; human capital;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H8 - Public Economics - - Miscellaneous Issues
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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