On the surge of altruism

To date, many arguments to explain altruistic behavior were based on `kin selection'. This note shows that evolution can sustain altruism even if the players are not necessarily genetically linked. Depending on the payoff parameters in a prisoner's dilemma game, there can be four distinct types of equilibria, for each of them the proportion of altruists in the population is described. The author is grateful to an anonymous referee for valuable comments. Responsible editor: Alessandro Cigno.     

Does time preference change with age?

This study looks at compensating differentials in the National Longitudinal Survey of Youth (NLSY) to derive estimates of the levels of time preference for labor force participants in each of 15 waves of data from 1979 to 1994. With these estimates the evolution of time preference over the life course is described. Future utility among labor force participants appears to be valued more highly by subjects who are older, more schooled, white, or male. Controlling for schooling level, a higher IQ is associated with a preference for more immediate rewards.If social rates of time preference are correlated with individual rates of time preference then population aging could create intergenerational asymmetries in the social rate of time preference.This phenomenon could make the optimal investments of young populations appear selfish to future generations that are older.Support from Hopkins Population Center (R24) is gratefully acknowledged. I am thankful for helpful comments received from Jim Burgess, Mike Grossman, Bruce Hamilton, Fritz Laux, Athanasios Orphanides, Katie Roche, and Eric Slade. All errors are my own. Responsible editor: Alessandro Cigno.     

Social security in a general equilibrium model with endogenous government behavior

In this paper attention is focused on the economic and political effects of an aging population. For that purpose, a general equilibrium model is used that allows for an endogenous analysis of decisionmaking on government policies. We concentrate here on the effects of an aging population on expenditures and levels of social security benefits, the provision of public goods and services, the private output and intergenerational conflicts. Special attention will be paid to the effects of changes in the retirement age and in capital endowments. Furthermore, the effects of issues related to aging, as changes in the political influence structure and the motive of other-directedness by others, are investigated.The authors are grateful to the participants of the ISPE conference. They wish to thank in particular the discussants Jean Frijns, Pierre Pestieau and Harry van Dalen for their helpful comments.     

Geography, demography, and early development

This paper explores the role of geography in early development. It presents a model where the odds of survival are higher in geographically favorable regions. In such regions, higher life expectancy prompts parents to devote more of their resources to old-age consumption and enables them to invest relatively more in the quantity and quality of their offspring. Investment in education, together with population growth, helps geographically-favorable economies to attain high levels of a more educated population that is necessary for sustained economic growth. The empirical evidence is generally supportive of the view that geographic attributes influenced regional population levels in Europe and its colonial offshoots around 1500 A.D. and that they affected population levels and educational attainment in low-income countries of the 1990s. For useful comments and suggestions I thank the editor, two anonymous referees, Daron Acemoglu, Ann Carlos, Phil Graves, Naci Mocan, Oded Stark, seminar participants at the University of Colorado at Boulder, the University of Colorado at Denver, and the 2002 Royal Economic Society Annual Conference. I owe a special debt of gratitude to my advisor Herschel Grossman who passed away in October 2004 after leaving his mark on many of us in the profession. The standard disclaimer applies. Responsible editor: Alessandro Cigno.     

Fertility,growth and the financing of public education and health

This paper considers the implications of the financing of government services to children when fertility decisions are endogenously determined. In particular, it is shown that when the services are financed by taxation, the equilibrium outcome is biased away from the socially preferred result. The bias results in higher fertility rates and lower economic growth rates than the efficient social optimum. This arises because each household internalizes the benefits, but not the costs of the tax-financed services. We consider alternative methods of financing the public provision of services and find that a combination of taxation and vouchers can eliminate the bias in the equilibrium outcome.We are grateful for comments from Alessandro Cigno and two anonymous referees.     

How does social security affect economic growth? Evidence from cross-country data

This paper investigates how social security interacts with growth and growth determinants (savings, human capital investment, and fertility). Our empirical investigation finds that the estimated coefficient on social security is significantly negative in the fertility equation, insignificant in the saving equation, and significantly positive in the growth and education equations. By contrast, the estimated coefficient on growth is insignificant in the social security equation. The results suggest that social security may indeed be conducive to growth through tipping the trade-off between the number and quality of children toward the latter.All correspondence to Junsen Zhang. We would like to thank the editor, two anonymous referees, Jim Davies, Frank Denton, Se-Jik Kim, and Mike McAleer for helpful comments and suggestions. Any remaining omissions and errors are the authors responsibility. Responsible editor: Alessandro Cigno.     

Population dynamics and life-cycle consumption

This paper presents a model where aggregate consumption depends on both the level of wealth and the age structure of population. The explicit consideration of an endogenous rate of time preference permits to analyze the important role of population ageing as a determinant of aggregate saving. Received: 23 October 2001/Accepted: 13 February 2002 I would like to thank an anonymous referee for his comments. Financial support from CNR and MURST is gratefully acknowledged. Responsible editor: Alessandro Cigno.     

Social aspirations and choice of fertility: why can status motive reduce per-capita growth?

To examine the relationship between social aspirations, fertility choices and growth performances, we develop a R&D-based model in which individuals care about the number of children they bring up and their social status. In such an economy, we find that stronger status motives have a negative effect on growth. The reason is that individuals bring up fewer children, as children are an obstacle to the achievement of their social status. Introducing an endogenous choice of quality for children, we show that stronger status motives lead individuals to bring up fewer but higher quality children. In this case, social aspirations heighten the desire of parents to substitute the quantity for the quality of children because education of children fosters society’s productive ability, indirectly improving parents’ social status. I would like to thank Michael Bleaney, Juntip Boonprakaikawe, Trudy Owens, Kaipichit Ruengsrichaiya, two anonymous referees, and one editor of the review for their helpful comments and suggestions. I am grateful to the University of Nottingham (UK) for its support during the redaction of this paper.     

Private versus public financing of education and endogenous growth: A comment on Bräuninger and Vidal

This note shows that the long-run effect in the case of a low skill trap in Br?uninger and Vidal (Journal of Population Economics (2000) 13:387–401) contains a mistake. While not affecting the paper's basic intuition, this implies that the discussion in the short-run analysis also applies in the long-run. Received: 24 April 2001/Accepted: 9 June 2001 I wish to thank Alessandro Cigno and an anonymous referee for useful comments. Responsible editor: Alessandro Cigno.     

Optimal age of retirement and population growth

The purpose of this paper is to study intergenerational optimal resources sharing when the social planer can choose the retirement age in addition to consumptions and investment. We use the extension of the Diamond analysis by Hu [1979] that incorporates endogenous retirement age. We found that the optimal retirement age is an increasing function of the population growth rate if the elasticity of substitution of old agents' labor for young agents' labor is lower than one. In the millian case, when the size of a population does not matter, and when the elasticity of substitution of old agents' labor for young agents' labor is strictly higher than one, the optimal retirement age is a decreasing function of the population growth rate. In the benthamite case, the change in the optimal retirement age is indeterminate. Received: 19 February 1999/Accepted: 27 February 2001 All correspondence to Bertrand Crettez. We would like to thank Jean-Pierre Vidal for very helpful comments on an earlier draft. An anonymous referee provided insightful comments on a previous version of this paper. Responsible editor: Alessandro Cigno.     

Cohort effects in the educational attainment of second generation immigrants in Germany: An analysis of census data

Even though second generation immigrants make up ever increasing population shares in industrialized countries we know little about their social integration and wellbeing. This study focuses on the educational attainment of German born children of immigrants. Their schooling success still lags behind that of natives. This paper investigates school attendance and completed degrees of second generation immigrants and finds that even after controlling for characteristics the educational gap remains large and significant. The available evidence suggests that this group as a whole does not assimilate to native educational standards and instead increasingly falls behind.This research was completed while the author was guest at the Institute for the Study of Labor (IZA) in Bonn, Germany. I am grateful for IZAs hospitality and particularly for the help of Thomas K. Bauer. I thank the anonymous referees and the editors for very helpful comments. Responsible editors: David Card and Christoph M. Schmidt.     

Endogenous fertility,altruistic behavior across generations,and social security systems

The present paper explores the impact of an intergenerational externality on private fertility decisions, under a pay-as-you-go social security system. The analysis is performed in the framework of a steady state growth model, with overlapping generations. To explain why households have children, altruism between parents and children is assumed. Surprisingly, the effects of altruism are not symmetric. The private fertility decisions are optimal only if children love their parents, because children then make private transfers at exactly the right level.Comments of participants of a seminar on economic theory of Prof. K. Jaeger at Free University of Berlin at July 20, 1989, are gratefully acknowledged. I am indebted to Alessandro Cigno, Frank Klanberg and Elmar Wolfstetter for many helpful suggestions.     

On the contribution of sectoral natural population growth to the aggregate poverty change

This note extends the Ravallion and Huppi (World Bank Econ Rev 5(1):57–82, 1991) aggregate poverty change decomposition to account for the distinct contribution of migration and differential natural population growth between sectors to the aggregate poverty change. We apply our decomposition to three Least Developing countries. We find that accounting for sectoral difference in natural population growth has a considerable impact on national poverty change. Responsible editor: Alessandro Cigno     

Subjective Well-Being,Poverty and Ethnicity in South Africa: Insights from an Exploratory Analysis

South Africa has one of the highest inequality levels in the world. In 1993, nearly half of the population were considered poor. These poverty and inequality levels were and still are a legacy of South Africa’s colonial and apartheid past. Since the end of apartheid, there has been a strong governmental effort to combat poverty and in this light a ‘social indicators movement’ has emerged. The aim of this article is to contribute to the South African social indicators research in three ways: Firstly, this article introduces ethnicity as a unit of analysis in the context of poverty and well-being. It is argued that racial categorisations are not justifiable and in the case of South Africa hide valuable insights. The results of an exploratory analysis suggest that ethnicity allows a more insightful analysis of poverty and well-being than race. Secondly, this article introduces a multiple correspondence analysis (MCA) in the context of subjective well-being research. Many studies regarding subjective well-being in South Africa use ordered probit regression models. It is argued here that these models are based on false assumptions and that a MCA can be seen as a suitable alternative since it constitutes an assumption free model. Lastly, the insights gained from the exploratory analysis are discussed. The MCA seems to show that subjective well-being can be regarded as an outcome measure. Furthermore, it is argued that there are cultural differences (between the ethnic groups) regarding subjective well-being. It seems that the ethnic groups in South Africa have different conceptions of well-being and that different factors influence their subjective well-being assessments. This work is partly based on a Master thesis from 2004 at the Institute for Development Policy and Management at the University of Manchester. I am grateful for the intellectual guidance, the constant support and encouragement by Wendy Olsen and for the comments on earlier drafts from Peter Edward, David A. Clark and two anonymous reviewers.     

人口老龄化与社会福利状况:国际比较及其启示

国际比较表明,无论是与人口老龄化程度相当的国家相比,还是与经济发展水平相当的国家相比,中国在公共福利支出和社会养老保障制度方面都存在明显的不足和滞后。人口老龄化挑战的真正涵义是:能否在经济、社会转型和人口迅速老龄化的条件下,建立起公平、合理、有效的国家制度安排和社会应对机制。解决人口老龄化问题的根本出路不仅在于加快经济发展,弘扬传统文化,而且在于完善社会保障制度、增加公共福利支出。     

On social security financial crisis

We indicate that financial crisis in social security programs might be endogenous because social security affects fertility and human capital's decisions and thus, the aggregate growth rate of the economy. These effects lead to an endogenous erosion of the financial basis of the PAYG social security program so that, as a consequence, the PAYG system is not sustainable and it requires continuous increases in the social security tax rate. I received helpful comments in an earlier version of this paper from G.S. Becker, Larry Sjaastad, two anonymous referees and participants at seminars at Pontificia Universidad Catolica de Chile and The University of Chicago. Remaining errors are my own responsibility. Responsible editor: Junsen Zhang.     

Bequests as a heir "disciple device."

This paper develops a model ofinter vivos gifts and bequests in a setting of moral hazard and adverse selection. Altruistic parents do not perfectly know how much effort their children make to earn their living, nor do they know their true level of ability.Inter vivos gifts take place prior to the realization of the children's earnings whereas at the moment of bequests, parents do observe them. We show that an optimal transfer policy generally uses a mix ofinter vivos gifts — deemed as more efficient — and bequests — deemed as more redistributive.We are thankful to Allessandro Cigno, Jacques Cremer, Claude d Aspremont and anonymous referees for their comments.Responsible editor: Alessandro Cigno     

The engagement game

Engagement is a costly social institution for which virtually no economic analysis exists. We explore the information gathering function of engagement in a game with a proposer who offers a long or short engagement, and a respondent, who may reject the proposal at various stages. Whether the proposer is a suitable match is uncertain, but a long engagement yields information with which the respondent can update prior probabilities. We consider pooling, separating and mixed strategy equilibria and relate our findings to the evolving institution of engagement and institutional circumstances that will improve its efficiency in generating successful matches.All correspondence to Amy Farmer. Responsible editor: Alessandro Cigno.     

Population policy and individual choice

The general equilibrium implications of endogenous fertility for several social issues of population policy are examined. Laissez faire is found to lead to Pareto optimality within generations even in the presence of public goods and Malthusian diminishing returns. On the other hand, bequests emerge as a major potential source of Pareto inefficiency when parents care about the number and welfare of their offspring. Also considered are questions of intergenerational justice and equity using an intergenerational social welfare function. It is shown that maximizing the sum of utilities always leads to a larger population than maximizing per capita utility, but that the laissez-faire solution may lie outside the interval bounded by the two criteria.Invited Lecture at the First Annual Conference of the European Society for Population Economics, Rotterdam, 18–19 September 1987In preparing this paper, I have drawn heavily on joint work with Assaf Razin and Efraim Sadka, both of Tel-Aviv University, and on our book, Household and economy: Welfare economics of endogeneous fertility (Academic Press, New York 1987). I am indebted to two anonymous referees for helpful comments