Program
Subjects
Works
Book Types
Back to issue
Cover of: The Vulnerability of Social Security When Fertility is Endogenous
Bas van Groezen, Lex Meijdam, Theo Leers

The Vulnerability of Social Security When Fertility is Endogenous

Section: Articles
Volume 158 (2002) / Issue 4, pp. 715-730 (16)
Published 09.07.2018
DOI 10.1628/0932456022975178
  • article PDF
  • available
  • 10.1628/0932456022975178
Due to a system change, access problems and other issues may occur. We are working with urgency on a solution. We apologise for any inconvenience.
Summary
This paper analyses the effects of rumours and changes in life expectancy in an economy with endogenous fertility and pay-as-you-go (PAYG) pensions. We show that the endogeneity of fertility makes society vulnerable to both pessimistic beliefs and an increasing life span. On the one hand, rumours that pension benefits decrease appear to be self-fulfilling in the short run. On the other hand, increasing longevity deteriorates the PAYG pension scheme both in the short and in the long run, as the number of children permanently declines.