Department of Economics

University of Southampton Alice Schoonbroodt

Dissertation Topics

Reading list with abstracts

Population aging, fertility and old age insurance (pension systems,...)

(*) Michele Boldrin, M. De Nardi and Larry E. Jones "Fertility and Social Security,". Working paper

Abstract

In this paper, we study the effects of differential sizes of governmentally provided pension funds on the incentives for parents to have children in two different models of endogenous fertility These two models are the Barro and Becker model of children as consumption and the Caldwell model of children as investments for old age as developed in Boldrin and Jones. We find that changing the size of a PAYGO Social Security System has only a very small effect on fertility in the B&B model, but that the effects are large, and quantitatively significant in the Caldwell version. For example, in the calibrated version of the Caldwell model that we use as our base case, we find that increasing the size of a PAYGO Social Security System from a tax rate of 10% to 25% gives rise to a fertility reduction of about 60% of the observed fertility differential between the U.S. and the Southern European countries. Shown in the graph is a time series of the entire fertility history of the U.S. from 1850 to now along with the predicted path of fertility from the Caldwell model discussed above. The chart is prepared using steady state to steady state movements of fertility in the model over time when the only changes are the actual changes in young adult mortality and changes in the size of the Social Security System from U.S. data.

Available at http://www.econ.umn.edu/%7Elej/papers/restudfertsocsec.pdf

(*) Ehrlich, I. and Lui, F., (1991), “Intergenerational Trade, Longevity, Intrafamily Transfers and Economic Growth,” Journal of Political Economy 99, 1029‑59.

Abstract

The authors develop an overlapping-generations model of endogenous growth in which human capital is the engine of growth and the generations are linked through material and emotional interdependencies within the family. Parents invest in their children to achieve both old-age support (care) and emotional gratification, and material support from children is determined through self-enforcing implicit contracts. The authors show that optimal intergenerational trade can then lead to maximization of growth opportunities. Their model produces a theory of the "demographic transition" linking longevity, fertility, and economic growth.

Available here.

Elizabeth M. Caucutt & Thomas F. Cooley & Nezih Guner, 2007. "The Farm, the City, and the Emergence of Social Security," NBER Working Papers 12854, National Bureau of Economic Research, Inc.

Abstract

During the period from 1880 to 1950, publicly managed retirement security programs became an important part of the social fabric in most advanced economies. In this paper we study the social, demographic and economic origins of social security. We describe a model economy in which demographics, technology, and social security are linked together. We study an economy with two locations (sectors), the farm (agricultural) and the city (industrial). The decision to migrate from rural to urban locations is endogenous and linked to productivity differences between the two locations and survival probabilities. Furthermore, the level of social security is determined by majority voting. We show that a calibrated version of this economy is consistent with the historical transformation in the United States. Initially a majority of voters live on the farm and do not want to implement social security. Once a majority of the voters move to the city, the median voter prefers a positive social security tax, and social security emerges.

Available here.

Neher, P.A. (1971), “Peasants, Procreation and Pensions,” American Economic Review 61, 380-389.

Razin, A. and U. Ben-Zion (1974), “An Intergenerational Model of Population Growth,” American Economic Review 65, 923-933.