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Pensions and fertility: in search of a link

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Abstract

In overlapping generations models with endogenous fertility wherein the retired partake of consumption but do not contribute to production (through their labor), fertility has a positive and a negative externality. These can be internalized through a child allowance (or tax) or a linkage between pension benefits and the number of children. The prescription rest crucially on the assumption that no parents are better than others in raising their children and that fertility can be perfectly controlled. When either of these two assumptions are violated, the case for such policy recommendations are greatly weakened.

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Authors and Affiliations

  1. Department of Economics, University of Illinois at Urbana-Champaign, Urbana, IL, 61801, USA

    Firouz Gahvari

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  1. Firouz Gahvari
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Correspondence to Firouz Gahvari.

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This paper is based on a keynote speech delivered at the IIPF 64th Congress, Maastricht, Netherlands, August 22–25, 2008. I am grateful to the organizers for the opportunity they accorded me and to the participants and a referee of this Journal for their comments. I am particularly indebted to Helmuth Cremer and Pierre Pestieau who over the years have collaborated with me in studying many of the issues I discuss in this paper.

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Gahvari, F. Pensions and fertility: in search of a link. Int Tax Public Finance 16, 418–442 (2009). https://doi.org/10.1007/s10797-009-9114-3

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  • DOI: https://doi.org/10.1007/s10797-009-9114-3

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