Fertility and pension systems

Rizzo, Giuseppe (2010): Fertility and pension systems.

Abstract

A broad political economics literature explains the introduction and expansion of pension systems, but the effects caused by the endogenous reduction of fertility are typically disregarded, as the fertility choice is usually considered exogenous. This paper suggests a political model that takes into account these effects and analyzes the net effect of the reduction of fertility costs on the dimension of pension systems. Some stylized facts support an inverted-U development pattern: a continuous and progressive increase of the fertility cost, after inducing the introduction of pension systems, tends to reduce, \emph{ceteris paribus}, their political support.

• Item Type: MPRA Paper
• Language: English
• Keywords: Family economics; Fertility; Political sustainability; Social security; Voting
• Subjects: J - Labor and Demographic Economics > J1 - Demographic Economics > J13 - Fertility ; Family Planning ; Child Care ; Children ; Youth; J - Labor and Demographic Economics > J1 - Demographic Economics > J14 - Economics of the Elderly ; Economics of the Handicapped ; Non-Labor Market Discrimination; H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior

References

Aaron, H., 1966. The social insurance paradox. Canadian Journal of Economics and Political Science 32, 371-374.

Barro, R. J., Becker, G. S., 1989. Fertility choice in a model of economic-growth. Econometrica 57, 481-501.

Becker, G. S., Barro, R. J., 1988. A reformulation of the economic-theory of fertility. Quarterly Journal Of Economics 103, 1-25.

Becker, G. S., Lewis, H. G., 1973. On the interaction between the quantity and quality of children. Journal of Political Economy 81, S279-88.

Boldrin, M., Jones, L. E., 2002. Mortality, fertility, and saving in a malthusian economy. Review of Economic Dynamics 5, 775-814.

Boldrin, M., Rustichini, A., 2000. Political equilibria with social security. Review of Economic Dynamics 3, 41-78.

Breyer, F., 1994. The political economy of intergenerational redistribution. European Journal of Political Economy 10, 61-84.

Browning, E. K., 1975. Why social insurance budget is too large in a democracy. Economic Inquiry 13, 373-388.

Caldwell, J. C., 1976. Toward a restatement of demographic transition theory. Population and Development Review 2, 321-366.

Caldwell, J. C., 1978. A theory of fertility: From high plateau to destabilization. Population and Development Review 4, 553-577.

Casamatta, G., Cremer, H., Pestieau, P., 2000. The political economy of social security. Scandinavian Journal Of Economics 102, 503-522.

Caucutt, E. M., Cooley, T. F., Guner, N., 2007. The farm, the city, and the emergence of social security. Working Paper 12854, National Bureau of Economic Research.

Cigno, A., Rosati, F. C., 1992. The effects of financial markets and social security on saving and fertility behaviour in italy. Journal of Population Economics 5, 319-41.

Cooley, T. F., Soares, J., 1999. A positive theory of social security based on reputation. Journal Of Political Economy 107, 135-160.

Cukierman, A., Meltzer, A. H., 1989. A political theory of government debt and deficits in a neo-ricardian framework. American Economic Review 79, 713-732.

Cutler, D. M., Johnson, R., 2004. The birth and growth of the social insurance state: Explaining old age and medical insurance across countries. Public Choice 120, 87-121.

de Walque, G., 2005. Voting on pensions: A survey. Journal Of Economic Surveys 19, 181-209.

Diamond, P. A., 1965. National debt in a neoclassical growth model. American Economic Review 55, 1126-1150.

Galasso, V., Profeta, P., 2002. The political economy of social security: a survey. European Journal of Political Economy 18, 1-29.

Galor, O., Weil, D. N., 2000. Population, technology, and growth: From malthusian stagnation to the demographic transition and beyond. American Economic Review 90, 806-828.

Hansson, I., Stuart, C., 1989. Social security as trade among living generations. American Economic Review 79, 1182-95.

Kalemli-Ozcan, S., 2002. Does the mortality decline promote economic growth? Journal of Economic Growth 7, 411-439.

Leibenstein, H., 1957. Economic backwardness and economic growth. Wiley, New York (NY).

Samuelson, P. A., 1958. An exact consumption-loan model of interest with or without the social contrivance of money. Journal of Political Economy 66, 467-482.

Tabellini, G., 1991. The politics of intergenerational redistribution. Journal of Political Economy 99, 335-57.

Tabellini, G., 2000. A positive theory of social security. Scandinavian Journal Of Economics 102, 523-545.

Veall, M. R., 1986. Public pensions as optimal social contracts. Journal Of Public Economics 31, 237-251.