Intergenerational Redistribution in a Small Open Economy with Endogenous Fertility
Journal
Journal of Population Economics
ISSN
0933-1433
Type
journal article
Date Issued
1997
Author(s)
Abstract
For pay-as-you-go financed pension systems, claims may be calculated according to individual contributions (income) or the number of children of a family. We analyse the optimal structure of these parameters in a model with endogenous fertility. It is shown that for both structural determinants there exists no interior solution of the problem of intragenerational utility maximisation. Thus, pure systems are always welfare maximizing. Furthermore, children-related pension claims induce a fiscal externality
that tends to be positive. The determination of the optimal contribution rate shows that the widely accepted Aaron-condition is in general a misleading indicator for the comparison of fully funded and pay-as-you-go financed pension systems.
that tends to be positive. The determination of the optimal contribution rate shows that the widely accepted Aaron-condition is in general a misleading indicator for the comparison of fully funded and pay-as-you-go financed pension systems.
Language
English
Keywords
Endogenous fertility
pay-as-you-go financed pension systems
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Springer
Publisher place
Berlin Heidelberg
Volume
10
Start page
335
End page
356
Pages
22
Subject(s)
Division(s)
Eprints ID
223642