Demographic change, PAYG pensions and child policies

Stauvermann, Peter J. and Kumar, Ronald Ravinesh ORCID: 0000-0001-9658-4896 (2018) Demographic change, PAYG pensions and child policies. Journal of Pension Economics & Finance, 17 (4). ISSN 1474-7472

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The aim of the paper is to investigate how child policies affect the population growth and to what extent these policies are useful to increase pension benefits of a pay-as-you-go pension system in a small open economy. Specifically, we analyze two different child policies: the provision of child allowances and an educational subsidy. We apply an overlapping generations model in its canonical form, where we consider endogenous fertility, endogenous growth and endogenous aging of the society. From the analysis, we conclude that with a child allowance, there is a consequent increase in the number of children and decrease in pension benefits and life expectancy. On the other hand, we note that with an educational subsidy, there is a decrease in the number of children, and an increase in the pension benefits and the life expectancy, respectively. The model developed aims to complement the models of the Unified Growth Theory.

Item Type: Article
Divisions: Institute of Management > Bolton Business School
Depositing User: Tracey Gill
Date Deposited: 12 Jan 2017 16:29
Last Modified: 18 Mar 2020 14:10
Identification Number: 10.1017/S1474747216000299

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