Premium
Backward Intergenerational Goods and Endogenous Fertility
Author(s) -
HATFIELD JOHN WILLIAM
Publication year - 2008
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2008.00385.x
Subject(s) - fertility , mandate , economics , outcome (game theory) , public good , welfare , government (linguistics) , overlapping generations model , public economics , microeconomics , labour economics , market economy , population , law , linguistics , philosophy , demography , sociology , political science
This paper characterizes the consequences of introducing the public provision of intergenerational goods to the elderly in a model with endogenous fertility. With exogenous fertility, it has been shown that the government can mandate the first‐best outcome by simply imposing the socially optimal transfer. By contrast, with endogenous fertility, the government can no longer enforce this outcome. This is due, in part, to the effects of mandatory provision on the birth rate. However, taxes may still have a salubrious effect on social welfare as they can eliminate particularly bad equilibria.