The Vulnerability of Social Security When Fertility is Endogenous - 10.1628/0932456022975178 - Mohr Siebeck
Economics

Bas van Groezen, Theo Leers, Lex Meijdam

The Vulnerability of Social Security When Fertility is Endogenous

Volume 158 () / Issue 4, pp. 715-730 (16)

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This paper analyses the effects of rumours and changes in life expectancy in an economy with endogenous fertility and pay-as-you-go (PAYG) pensions. We show that the endogeneity of fertility makes society vulnerable to both pessimistic beliefs and an increasing life span. On the one hand, rumours that pension benefits decrease appear to be self-fulfilling in the short run. On the other hand, increasing longevity deteriorates the PAYG pension scheme both in the short and in the long run, as the number of children permanently declines.
Authors/Editors

Bas van Groezen No current data available.

Theo Leers No current data available.

Lex Meijdam No current data available.