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| Reference : Stochastic Fertility, Moral Hazard, and the Design of Pay-As-You-Go Pension Plans |
| Scientific journals : Article | |||
| Business & economic sciences : Economic systems & public economics | |||
| http://hdl.handle.net/2268/118993 | |||
| Stochastic Fertility, Moral Hazard, and the Design of Pay-As-You-Go Pension Plans | |
| English | |
Pestieau, Pierre  [Université de Liège - ULg > HEC-Ecole de gestion de l'ULg > HEC-Ecole de gestion de l'ULg >] | |
| Cremer, H., Gahvari, F. [ > > ] | |
| 2011 | |
| CESifo Economic Studies | |
| 57 | |
| 2 | |
| 332–348 | |
| International | |
| [en] pay-as-you-go social security ; stochastic fertility ; moral hazard | |
| [en] This article models a two-period overlapping generations economy in the steady state
where the realization of the quantity/quality number of children depends on an initial investment in children and on a random shock. It shows that the implementation of the first-best allocation, in which the effort level is publicly observable, requires a subsidy on the investment in children. There should also be full insurance with respect to second-period consumption and pensions must be invariant to the number of children. On the other hand, when investment is unobservable and one cannot subsidize it, the full insurance property goes away. In this case, pensions must be linked positively to the number of children. | |
| http://hdl.handle.net/2268/118993 |
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