Property rights and efficiency in OLG models with endogenous fertility

• 成果类型: Article
• 署名作者: Schoonbroodt, Alice; Tertilt, Michele
• 署名单位: University of Iowa; University of Mannheim; National Bureau of Economic Research; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2013.09.016
• 发表日期: 2014
• 页码: 551-582
• 关键词: Overlapping generations; fertility; EFFICIENCY

摘要

Is there an economic rationale for pronatalist policies? We propose and analyze a particular market failure that leads to inefficiently low fertility in equilibrium. The friction is caused by the lack of ownership of children: if parents have no claim on their children's income, the private benefit from producing a child can be smaller than the social benefit. We analyze an overlapping-generations (OLG) model with fertility choice and parental altruism. Ownership is modeled as a minimum constraint on transfers from parents to children. Using the efficiency concepts proposed in Golosov, Jones, and Tertilt [38], we find that whenever the transfer floor is binding, fertility choices are inefficient. Second, we show that the usual conditions for efficiency are not sufficient in this context. Third, in contrast to settings with exogenous fertility, a PAYG social security system cannot be used to implement efficient allocations. To achieve an efficient outcome, government transfers need to be tied to fertility choice. (C) 2013 Elsevier Inc. All rights reserved.