Uncertain lifetime, fertility and social security

Investigating the effects of population aging on fertility and economic growth, we show that an increase in life expectancy lowers the fertility rate and raises life-cycle savings, and that a pay-as-you-go social security does not reverse the effect on fertility. Received: 10 March 2000/Accepted: 28 April 2000     

Aging, fertility, social security and political equilibrium

We analyze the effect of population aging on the political choice of the size of a pay-as-you-go (PAYG) social security system, incorporating the heterogeneity of individuals in their preference for having children, and hence the endogenous fertility choices of individuals, into a simple overlapping generations model. We show that population aging may result in an increase in the contribution rate, increasing the share of the retired population who prefer a higher contribution rate; and that, if the system involves redistribution between retirees with different contributions, the increased contribution rate raises the number of individuals who have children, i.e., future contributors.     

Effects of public education and social security on fertility

Introducing a fertility decision and child care cost into an overlapping generations model with public education and social security, we examine the effects of these public policies on fertility. We show that an increase in income tax, which finances social security benefits and public investment in education, increases fertility. On the other hand, with a constant tax rate, a change in the allocation from social security benefits to public investment in education decreases fertility and, with a constant social security tax, the effect of education tax on fertility is neutral.      

Endogenous fertility,mortality and growth

Economic and demographic outcomes are determined jointly in a choice-theoretic model of fertility, mortality and capital accumulation. There is an endogenous population of reproductive agents who belong to dynastic families of overlapping generations connected through altruism. In addition to choosing savings and births, parents may reduce (infant) deaths by incurring expenditures on health-care which is also provided by the government. A generalised production technology accounts for long-run endogenous growth with short-run transitional dynamics. The analysis yields testable time series and cross-section implications which accord with the empirical evidence on the relationship between demography and development. Received: 22 April 1996 / Accepted: 2 April 1998     

Pay-as-you-go social security and endogenous fertility in a neoclassical growth model

This paper theoretically studies how unfunded pay-as-you-go social security affects economic growth, the fertility rate, and welfare in a neoclassical growth model. In addition, this paper considers a more general form of child-rearing cost, which is a mixture of time and money. The first observation is that whether the fertility rate increases or not by the expansion of the pay-as-you-go social security depends on (1) the size of the monetary child-rearing cost relative to the time spent on child-rearing and (2) the current fertility and interest rate in laissez faire. The second observation is that income per worker can increase by an expansion in pay-as-you-go social security when the output elasticity of capital is sufficiently small and the payroll tax rate is high. The last finding is that welfare can be improved even though capital is underaccumulated in an economy.     

构建农村社会保障三项奠基性制度

社会主义市场经济的建立需要健全的社会保障体制作保证,如果占总人口大多数的农村居民得不到保障,中国的社会保障制度就很难称得上完善。在本文中笔者着重探讨了农村最低生活保障制度、农村合作医疗制度以及农村居民养老保障制度,通过对这三项制度的构建基本就构建了中国农村社会保障制度的基础。     

The effects of financial markets and social security on saving and fertility behaviour in Italy

The paper aims to ascertain the extent to which saving and fertility decisions are affected by the availability and attractiveness of market-based or state-provided alternatives to the family as a source of old-age support. Subordinately, the paper aims to bring evidence to bear on the assumption that fertility is endogenous and jointly determined with saving, and to test two alternative hypotheses about individual motivations. The saving and fertility implications of two alternative models of family choice — based one on the assumption of pure self-interest, the other on that of intergenerational altruism — are first derived theoretically. Saving and fertility equations are then estimated from Italian time-series data, using as explanatory variables the market rate of interest, the social security deficit, various measures of capital market accessibility and social security coverage, and a number of income and wage variables. Particularly worthy of note is the result that a fully-funded increase in social security coverage raises saving, while an increase in the social security deficit has the opposite effect. The empirical findings appear to support the assumption that fertility is endogenous and jointly determined with saving, and to favour the hypothesis that individual decisions are motivated by self-interest rather than intergenerational altruism. Some of the policy implications are briefly discussed in the concluding section.While retaining responsibility for any errors, the authors wish to thank Carlo Casarosa, Wolfram Richter, Ed Wolff and three anonymous referees for helpful comments. Financial support from MURST 40%, under national project Capitale, Capitale Umano, Sicurezza Sociale e Dinamiche Demografische Endogene, is gratefully acknowledged.     

Metropolitan social structure,labor markets,and fertility

This paper develops and examines a community-level model of fertility, incorporating both sociological and economic theoretical perspectives. Data from several government and private sources are analyzed in a series of reduced-form, multivariate regression models. Generally, the results demonstrate that while the conceptual relationships from both schools receive some empirical support, the social structural characteristics (such as social class, religious and ethnic composition) offer somewhat greater explanatory power. In a subsequent analytic stage, principal components analysis is employed in order to estimate a series of revised models, clarifying some inconsistencies found when employing a more “naive” model testing strategy.     

Modern and traditional value orientations and fertility behavior: A social demographic study

Modern versus traditional value orientations based on the Kluckhohn and Strodtbeck schema are related to family size preferences and birth control effectiveness. Value orientations are viewed as mediating the relationship between socioeconomic status and the fertility behavior variables. Interviews with a probability sample of women in Lexington, Kentucky, provide the data for testing the hypothesized relationships. The results indicate that both value orientations and socioeconomic status are related to fertility behavior. The inference can be made that value orientations aid in interpreting the relationship between socioeconomic status and fertility behavior but that other status-related variables are operating.     

Time preference, international migration, and social security

This paper analyzes both the formation of long-run migration incentives and the consequences of a regime change from “autarky” to “free migration” in an overlapping-generations framework with two countries. Under autarky the countries may differ with respect to their aggregate savings rate or with respect to their pension-wage ratio. It is shown that an individual prefers to live in a country where the capital-labor ratio is close to the Golden Rule level and where his characteristics are relatively scarce. Both the migration incentives and the consequences of free migration are determined by these two effects. Received: 2 March 1998/Accepted: 10 February 1999     

Endogenous division rules as a family constitution: strategic altruistic transfers and sibling competition

Based on the notions of parental altruism, sibling competition, and family constitution, we present a self-enforcing model where heterogeneous children have economic incentives to supply family-specific merit goods (e.g., companionship) to their parents for securing inheritable wealth and the altruistic parents decide on division rules according to an optimizing behavior. In our analysis of intergenerational cooperation and intragenerational competition, the altruistic parents care about the efficiency of the children-provided merit goods and the equity of the children’s incomes. For an optimal allocation of wealth, the parents strategically partition it into two pools: one to be distributed equally whereas the other unequally according to their children’s supply of merit goods. We look at motivation of the parents in allocating their wealth to the two different pools. The analysis of endogenous division rules has implications for the compatibility between equal postmortem transfers and unequal inter vivos gifts, both of which are consistent with parental altruism.     

Old-age security, religious celibacy, and aggregate fertility in a Tibetan population

Using the family system as a framework, this study investigates the connection between old-age security concerns and aggregate fertility in Sama and Lho, two ethnically Tibetan villages of highland Nepal. The microdemographic approach reveals a difference in family systems between the two villages that results in Sama having a significantly lower level of fertility than Lho. The key difference lies in the practice of Sama’s (but not Lho’s) householders of designating a daughter to be a nun, a strategy meant to retain female labour within the household and thereby guarantee a caretaker in old age. Although the effect of this practice on individual fertility is unclear, the comparison with Lho reveals how it sharply curtails aggregate fertility by preventing nearly one in five women from marrying. In this case the motivation to ensure old-age security acts as an unintentional preventive check on population growth. Comparisons with other societies illustrate how the population of Sama combines elements of both the historical European and Asian demographic experiences.     

Demographic change and social security

This paper gives an overview over some central aspects of the highly complex topic, pointing out, e.g. the need for more longitudinal research in understanding effects of structural changes in demography and economy on social security. Starting from challenges by an ageing population for health and pension schemes it is briefly discussed whether changes in labour force participation or restructuring public expenditure can soften financing problems. Concerning reforms in pension schemes first changing retirement ages is briefly discussed and then some of the shortcomings in the debate on capital funding versus pay-as-you-go fincancing.Revised, updated and extended version of a lecture, given at the First Annual Congress of the European Society for Population Economics, Rotterdam, September 18, 1987. Revision and extension were inspired by two referees.     

Private support and social security

The issue is addressed whether assistance to persons in need can be left to the ‘family’ and the ‘community’. In that case people depend on their social networks. The support a person receives through a given network of social ties is examined. However, ties are diverse and subject to change. By means of a model of the dynamics of social ties, the conditions for adequate private support are analyzed. The sustainability of private support over time is examined by incorporating the impact on social ties of lending and receiving support. It is shown that support is only an effective alternative in a limited number of situations. Received: 2 January 1997 / Accepted: 2 February 1998     

Social security,social welfare and the aging population

This study examines the effects of pay-as-you-go social security programs in aging economies when the middle-aged both educate their dependent children and subsidize the retirement of the old. Using an overlapping generations framework in which agents are three-period lived but timing of death in the third period is uncertain, we analyze the effects of social security tax schemes, under various demographic assumptions, on capital accumulation, education expenditures, social welfare, and economic growth. We find that in many cases social security crowds out education, and reduces economic growth and social welfare. Received: 29 April 1998/Accepted: 3 March 1999     

Gender equity, social institutions and the future of fertility

Sustained very low levels of fertility in advanced countries can be explained by incoherence between the levels of gender equity applying in different social institutions. In countries with very low levels of fertility, high levels of gender equity are postulated in institutions that deal with people as individuals, while low levels of gender equity apply in institutions that deal with people as members of families.     

Social security and fertility: An international perspective

A number of population scholars have asserted that social security programs such as old-age programs lead to decreased fertility levels because parents need not rely on children for "security" in old age. There is, however, a paucity of empirical data on the above. This paper analyzes 67 countries and shows that social security programs have a measurable negative effect on subsequent levels of fertility. In fact, the social security programs appear to have as much of an independent impact on fertility as do the traditional correlates of fertility (infant mortality, education and per capita income).     

Socioeconomic status,value orientations,and fertility behavior in India

This paper examines the role assumed by value orientations in the explanation of fertility behavior. Specifically the concern is with the extent to which value orientations intervene between, or mediate, the relationship between socioeconomic status and fertility behavior. The relationships between socioeconomic status, four types of value orientations and three aspects of fertility behavior are examined among males in India. In most instances value orientations provide neither the sole nor the partial interpretations of the relationship between socioeconomic status and fertility. The results of this investigation suggest once again the inadequacy of value orientations as predictors of fertility behavior.     

Endogenous fertility,endogenous lifetime and economic growth: the role of child policies

We examine the effects of child policies on both transitional dynamics and long-term demo-economic outcomes in an overlapping-generations neoclassical growth model à la Chakraborty (J Econ Theory 116(1):119–137, 2004) extended with endogenous fertility under the assumption of weak altruism towards children. The government invests in public health, and an individual’s survival probability at the end of youth depends on health expenditure. We show that multiple development regimes can exist. However, poverty or prosperity does not necessarily depend on the initial conditions, since they are the result of how a child policy is designed. A child tax, for example, can be used effectively to enable those economies that were entrapped in poverty to prosper. There is also a long-term welfare-maximising level of the child tax. We show that a child tax can be used to increase capital accumulation, escape from poverty and maximise long-term welfare also when (a) a public pay-as-you-go pension system is in place and (b) the government issues an amount of public debt. Interestingly, there also exists a couple child tax–health tax that can be used to find the second-best optimum optimorum. In addition, we show that results are robust to the inclusion of decisions regarding the child quantity–quality trade-off under the assumption of impure altruism. In particular, there exists a threshold value of the child tax below (resp. above) which child quality spending is unaffordable (resp. affordable) and different scenarios are in existence.