|
on Demographic Economics |
| By: | Youngsoo Jang (Yonsei University); Svetlana Pashchenko (University of Georgia); Ponpoje Porapakkarm (National Graduate Institute for Policy Studies) |
| Abstract: | Should public policies address inequality due to heterogeneous life expectancy? Intuitively, taking short life as a disadvantage, such policies should favor those with high mortality. Yet, pension systems implicitly redistribute from low-life-expectancy to high-life-expectancy people. Moreover, this direction of redistribution is optimal from the perspective of the standard utilitarian welfare criterion. We study mortality-related redistribution in a more flexible setting. We start by establishing a formal framework for the analysis by clearly distinguishing between the redistribution along mortality and income dimensions, and thus between mortality and income progressivity. We then show that it is optimal to redistribute towards high-mortality people in two cases. First, when welfare criterion features aversion to lifetime inequality which exceeds aversion to consumption inequality. Second, when income and mortality are negatively correlated, and income redistribution tools are limited. |
| Keywords: | Mortality-related redistribution, Welfare criteria, Pensions, Prioritarianism |
| JEL: | D30 D60 D63 H55 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:yon:wpaper:2025rwp-268 |
| By: | Luca Pensieroso (Université Catholique de Louvain); Alessandro Sommacal (Department of Economics (University of Verona)); Gaia Spolverini (Université Catholique de Louvain) |
| Abstract: | We study the U.S. fertility transition by family type and document a novel fact: intergenerational coresidence has been systematically associated with lower fertility than nuclear families. This gap has been narrowing over time. This fact cannot be easily explained by existing theories. We propose a new theory in which both fertility and family structure are endogenous. In our theory, a positive fertility differential in favour of the nuclear family emerges when the amount of resources allocated to the young generation under coresidence is lower than the amount they would enjoy in a nuclear family. The allocation of resources depends on the income of the young relative to that of their coresiding parents and on preferences for intergenerational coresidence. We derive the model analytically, and find empirical support for its main mechanism. Simulations from a calibrated dynamic general equilibrium version of the model confirm that the model has the right qualitative behaviour, and is quantitatively meaningful. |
| Keywords: | Family type, Family structure, Quantity-quality trade off, Overlapping generations, Dynamic General Equilibrium, Unified Growth Theory |
| JEL: | J10 O40 O11 E13 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ver:wpaper:08/2025 |
| By: | Quang-Thanh Tran (Development and Policies Research Center (DEPOCEN)); Akiomi Kitagawa (Graduate School of Economics and Management, Tohoku University) |
| Abstract: | This paper employs an overlapping generations model to analyze how placing the burden of caring for both elderly parents and children on the working generation shapes fertility and other economic outcomes. In the model, fertility decisions create intergenerational spillovers. When one generation has fewer children, the next generation faces a heavier caregiving burden for its elderly parents, which in turn discourages childbearing. The model reveals sharply different long-run trajectories depending on the time intensity of caregiving. If care demands are moderate, sustainable growth remains feasible despite these externalities. However, when care becomes highly time-intensive, fertility declines, labor supply contracts, and the economy risks falling into a ``nursing hell, " where most time is devoted to caregiving. Policy measures, such as child allowances, can alleviate this dynamic by expanding the number of siblings and reducing the per-capita caregiving burden. Yet if care demands are extremely high from the outset, even such interventions cannot avert structural collapse. |
| Keywords: | dual caregiving, endogenous fertility, overlapping generations, sustainability |
| JEL: | E13 J13 J14 J22 J24 O11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:dpc:wpaper:0325 |