Children and pensions

Recent economic explanations of changes in fertility behaviour have focussed on the effects of labour-market-related incentives. The present paper draws attention to another set of incentives, those connected with the transfer of resources over time. The theoretical implications of intergenerational altruism as a possible motive for having children and making transfers to them are considered, and contrasted with those arising from the competing hypothesis that such actions are motivated by old-age-security considerations. From a comparison of these theoretical predictions with the findings of a number of empirical studies, it would appear that self-interested concern for one's old age, rather than any great love for future members of one's dynasty, is or has been so far the dominant force driving fertility and intergenerational transfers worldwide.Presidential Address to the European Society for Population Economics, Fifith Annual Conference, 6–8 June 1991, Pisa, Italy. the author is grateful to two anonymous referees for helpful comments, and to conference participants whoe intervened in the discussion, but retains full responsibility for any remaining errors or shortcomings.     

Public pensions,family allowances and endogenous demographic change

In addition to an old-age insurance system which redistributes income from the young to the old, family allowances build a further redistributive system which typically favors younger and burdens older generations. Family allowances have two main tasks: first, child allowances offer an incentive for child-bearing which influences fertility in an economy. Second, subsidies which ease the financial burden of a child's education guarantee a higher average level of productive skills and therefore enhance net domestic product. If individual demand for having and educating children leads to an impact on the economic system as a whole, we have external effects. In such a case, corrective taxation (Pigouvian tax) should be considered.Earlier versions of this paper were presented at conferences in Bergen, Dublin, Gmunden, Oldenburg and Vienna. The paper benefitted greatly from discussions with participants of these conferences and from the suggestions of two anonymous referees of this journal. Financial support through the Norwegian Research Council (the Ruhrgas scholarship scheme) and the Deutsche Forschungsgemeinschaft (Sonderforschungsbereich 303) is gratefully acknowledged.     

Fertility-related pensions and cyclical instability

In this paper, we study a general equilibrium model with overlapping generations, endogenous fertility and public pensions. By assuming Cobb–Douglas technology and logarithmic preferences, we show that the introduction of a fertility-related component in the pay-as-you-go pension scheme may destabilise the long-term equilibrium and cause endogenous fluctuations when individuals have static expectations. The possibility of cyclical instability increases (resp. reduces) when both the subjective discount factor and relative weight of individual fertility in pay-as-you-go pensions (resp. the parents’ taste for children) increase(s). Interestingly, when public pensions are contingent on the individual number of children, the financing of small-sized benefits may cause the occurrence of a flip bifurcation, two-period cycles and cycles of a higher order. In addition, we show through numerical simulations that these results hold in a more general setting with a constant inter-temporal elasticity of substitution utility function and a constant elasticity of substitution production function. Our findings identify a possible novel factor responsible for persistent deterministic fluctuations in a context of overlapping generations, while also representing a policy warning regarding the destabilising effects of fertility-related pension reforms, which are currently high in both the theoretical debate and the political agendas of several developed countries.     

Assessing the efficiency of public education and pensions

Theory says that, in an overlapping-generations context, intergenerational transfer agreements are efficient if they induce equality between certain implicit rates of return. We apply this theory to the case of public education and pensions, where public education is interpreted as a loan from middle age to young, and pensions are the repayment of this loan, plus interest, from middle age to old. We use micro- and macrodata from Spain to estimate how far actual arrangements are from the normative goal. When demographic stationarity is assumed, efficiency appears reachable. When demographic change is accounted for, efficiency is far from being achieved. Nevertheless, and contrary to earlier predictions in the generational accounting literature, our findings suggest that future generations may not necessarily be worse off than current ones.      

Aging and political decision making on public pensions

In this paper decision making on public pensions in a representative democracy is modeled within the framework of the well-known two-overlapping-generations (OLG) general-equilibrium model with rational expectations. The model is used to analyze the effects of aging on the economy in general and on the evolution of public pension schemes in particular, where aging is interpreted as a combination of a decrease in the rate of population growth and an increase in the political influence of pensioners. Analytical results are derived for the long run as well as for the short run by the method of comparative statics and comparative dynamics respectively. It appears that an increase in transfers to the old is not guaranteed if due to aging their political power increases. JEL classification: J14, H55 Received April 5, 1995 / Accepted September 4, 1995     

客观看待离婚 共筑和谐家庭——对中国离婚状况的分析

本文通过对我国离婚状况的分析,可以看出我国的离婚率自改革开放以来呈现逐年上升的趋势,主要是多元因素综合作用的结果。并指出在改革开放的社会大背景下,今后我国离婚率将继续上扬,离婚现象将更为普遍,这将是一个客观的趋势。因此要求人们客观看待离婚,重视婚姻质量,提高婚姻素质,共筑和谐家庭。     

Divorce law and family formation

Several studies have investigated whether unilateral divorce laws raised divorce rates, with mixed results. This paper asks whether unilateral, and no-fault, divorce laws influenced family formation. Besides their interest to policy makers, such effects may help theorists understand the mechanisms through which laws affect behavior. The results suggest that no-fault laws slightly reduced fertility, and unilateral divorce modestly increased divorce and legitimacy. However, the pattern of effects is not consistent with any of the hypotheses reviewed, and the estimated magnitudes suggest that changes in divorce law were not a major cause of changing family structure.      

Fertility and PAYG pensions in the overlapping generations model

This article analyses how long-run pay-as-you-go public pensions react to a change in fertility in the Diamond overlapping generations model. While it might seem well established both in academic and political debates that the decline in fertility represents a “demographic time bomb” for the sustainability of public pensions, it is shown that a falling birth rate need not necessarily cause the fall of pensions in the long run.     

Population aging and PAYG pensions in the OLG model

This paper shows the effects on a pay-as-you-go pension system of the demographic change in the standard overlapping generations model. Firstly, we consider a setting with exogenous fertility and then a model with endogenous fertility. In both cases, population aging due to increased longevity implies a reduction in pensions payouts.     

Growth and unemployment in an OLG economy with public pensions

This paper develops an overlapping generations model including (1) a productive externality as an engine of endogenous growth and (2) wage setting by trade unions as the cause of unemployment. Within this framework, the paper considers growth and unemployment affected by public pensions under the following two types of pension system: the proportionate pension system where only the contributors, that is, the employed, receive pensions, and the lump-sum pension system where both the employed and the unemployed receive pensions. It is shown that public pensions create a trade-off between growth and employment in the former system, whereas they produce no trade-off in the latter.     

Public pensions. The role of public choice and expectations

In this paper the public-choice approach to explaining the evolution of public pension schemes is surveyed. Emphasis is laid on the relation between expectations on future political decisions and future demographic and economic developments, on the one hand, and current political and economic decisions, on the other hand.Revised version of an invited lecture given at the Sixth ESPE-Conference, June 11–13, 1992, Gmunden in Austria.     

Fragile Employment,Liquid Love: Employment Instability and Divorce in Israel

The study examines the relationship between the employment stability of first-marriage couples and risk of divorce in Israel. This research question is of particular interest owing to the centrality of the family in Israeli society, rising divorce rates, and increasing employment instability and “deregulation” of the labor market. We capture employment instability through two dimensions: the pattern of employment instability within couples and the continuity of each partner’s employment instability. We utilize this conceptualization to identify the link between employment instability and divorce, focusing on gender and socioeconomic resources. Data were from combined Israeli census files for 1995–2008, annual administrative employment records from the National Insurance Institute and the Tax Authority, and the Civil Registry of Divorce (N = 10,891 couples). Using a series of discrete-time event-history analysis models, findings indicate that husbands’ employment instability, especially when wives have stable employment, increases the risk of divorce; employment stability continuity has opposite gender effects on that risk; and the effect of employment instability on divorce remains significant after taking into account household economic resources. The findings reveal asymmetric gender patterns of the effect of employment instability on divorce, beyond the socioeconomic resources of the household.     

Divorce,living arrangements,and material well-being during the transition to adulthood in rural Malawi

In this paper, we use longitudinal data to investigate how parental death and divorce influence young women’s own experience of divorce in Malawi, a setting where women marry relatively early and unions are fragile. We find that maternal death and parental divorce are positively associated with divorce for young women but, after controlling for socio-demographic and marital characteristics, only the association with maternal death remains statistically significant. Maternal and paternal death are both strongly associated with women’s post-divorce living arrangements, which in turn affects their material well-being. This finding suggests that divorcing at a young age shapes the subsequent life chances of women; although some women return to their parental home and may have the opportunity to reset the transition to adulthood, other women begin their 20s as head of their own household and with considerable material disadvantage.     

Pay-as-you-go financed public pensions in a model of endogenous growth and fertility

Employing an overlapping generations endogenous growth model in which parents derive utility from having children and, additionally, expect children to support them in old age, this paper explores the interrelation between growth, fertility, and the size of pay-as-you-go financed public pensions. It is shown that small sized public pensions stimulate per capita income growth, but further increases in public pensions eventually reduce it. Fertility, on the other hand, falls by an increase in public pensions if they are either small or large. Medium sized public pensions, however, may stimulate fertility. Received: 9 September 1997 / Accepted: 10 April 1998     

Divorce,Separation, and Housing Changes: A Multiprocess Analysis of Longitudinal Data from England and Wales

This study investigates the effect of marital and nonmarital separation on individuals’ residential and housing trajectories. Using rich data from the British Household Panel Survey (BHPS) and applying multilevel competing-risks event history models, we analyze the risk of a move of single, married, cohabiting, and separated men and women to different housing types. We distinguish moves due to separation from moves of separated people and account for unobserved codeterminants of moving and separation risks. Our analysis shows that many individuals move due to separation, as expected, but that the likelihood of moving is also relatively high among separated individuals. We find that separation has a long-term effect on individuals’ residential careers. Separated women exhibit high moving risks regardless of whether they moved out of the joint home upon separation, whereas separated men who did not move out upon separation are less likely to move. Interestingly, separated women are most likely to move to terraced houses, whereas separated men are equally likely to move to flats (apartments) and terraced (row) houses, suggesting that family structure shapes moving patterns of separated individuals.     

中国的离婚率与社会结构变化分析

从中国的离婚率与社会结构变化的时间序列分析中可以看出 :离婚率随非农产业人口比重的提高而提高 ,并有三年的时滞 ;离婚率也和人口城市化的发展有密切的关系 ,两者的比重一并提高 ,但约有五年的时滞。因这两方面社会结构的变化 ,直接影响妇女就业率提高和妇女职业结构的变化 ,而由此引起的人口迁移流动的大变动 ,也必然影响婚姻家庭观念的变化     

Psycho-Social and Economic Adjustment of Mid-Life Women After Divorce:

The purpose of this research was to examine how midlife women adjusted psychologically, socially, and economically after the dissolution of a long-term marriage. Specific attention was given to evaluating the extent of pre-retirement planning before and after the divorce transition and perceptions regarding the later years. The data indicates chat a majority of women established a positive self-identity within five years after divorce. However, few women in the sample have acquired financial planning skills which severely jeopardizes their economic well-being after retirement.