Please use this identifier to cite or link to this item: https://doi.org/10.1016/j.jedc.2006.12.005
Title: Optimal social security in a dynastic model with investment externalities and endogenous fertility
Authors: Zhang, J.
Zhang, J. 
Keywords: Bequests
Externality
Fertility
Social security
Welfare
Issue Date: Nov-2007
Citation: Zhang, J., Zhang, J. (2007-11). Optimal social security in a dynastic model with investment externalities and endogenous fertility. Journal of Economic Dynamics and Control 31 (11) : 3545-3567. ScholarBank@NUS Repository. https://doi.org/10.1016/j.jedc.2006.12.005
Abstract: This paper studies optimal pay-as-you-go social security with investment externalities, positive bequests and endogenous fertility. With an investment externality, a competitive solution without social security suffers from under-investment in capital and over-reproduction of population. We show the existence of time-consistent optimal social security that improves welfare by reducing fertility and increasing capital intensity. We also illustrate numerically that a small degree of this externality can justify the observed high ratios of social security spending to GDP. © 2007 Elsevier B.V. All rights reserved.
Source Title: Journal of Economic Dynamics and Control
URI: http://scholarbank.nus.edu.sg/handle/10635/132294
ISSN: 01651889
DOI: 10.1016/j.jedc.2006.12.005
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