Intergenerational Risk Sharing,Pensions, and Endogenous Labour Supply in General Equilibrium*

We show that a two‐tier pension system, with a pay‐as‐you‐go first tier and a fully funded, defined wage‐indexed second tier, can provide for optimal intergenerational risk‐sharing without distorting the labour supply, thereby achieving the first best. Other arrangements with a fully‐funded second tier fail to achieve the first best.     

Public Education and Intergenerational Economic Mobility

This paper examines the role of public education in determining intergenerational economic mobility. It considers a model in which education is free and admission to schools is competitive. The results indicate that for mobility to increase during the process of development, the share of resources devoted to public education needs to be large enough to offset the relative advantage of having educated parents in academic attainment.     

Intergenerational Transfer of Human Capital and Optimal Education Policy

We study the design of education policies (subsidies and public education) when parents' investment in education is motivated by warm‐glow altruism and determines the probability that a child has a high ability. The optimal subsidy is not necessarily positive. It is determined by two conflicting terms: a Pigouvian term (warm‐glow altruists do not properly account for the impact of education on future generations) and a “paternalistic” effect (the warm‐glow term may not be fully included in social welfare). Finally, total crowding out of private expenditure (for one of the types) by public education may be desirable.     

子女教育、代际支持与家庭贫困的变动

子女教育是影响农村家庭贫困变动的一个重要因素。通过对14省区609户农村家庭调查结果的分析,子女接受教育程度越高,自身一代家庭摆脱贫困的比例越高,并且能传承下代家庭使其免受贫困;家庭贫困代际变动的断裂点为15年(大专教育)。     

Pensions and fertility incentives

Abstract.  This paper discusses the welfare implications of a pay‐as‐you‐go pension reform by introducing a child benefit in an endogenous fertility setting. In the model of a small open economy, higher fertility is associated with a reduction of lifetime labour supply. The optimum share of fertility‐related pensions is always below unity, but generally positive. The former is true, since individuals do not take into account the impact of their labour supply choice on the parent generation. It is demonstrated that child allowances are equivalent to fertility‐related pensions as instruments to achieve the optimum allocation. JEL classification: H23, H55, J13     

The Financial Stability of Notional Account Pensions

A number of European countries are reforming their pension benefit formulas by adopting 'notional' accounts. These accounts are used to determine individual benefits, but pay-as-you-go financing is retained. This paper addresses the belief that by choosing adjustment rules cleverly, notional accounts can provide automatic financial equilibrium in the short run. If this were true, it would be a valuable advantage in terms of insulating the government budget from demographic pressures, while insulating the pension budget from fiscal pressures. It is shown that notional account benefit formulas cannot provide automatic financial equilibrium in the short run. The paper also suggests that if indexing rules are chosen in a particular way, and shocks revert rapidly to a mean, the pension institution may achieve financial stability in the long run. However, long-run stability is unlikely to be valuable because political interference occurs in the short run.     

Tuition Fees for Higher Education and Intergenerational Mobility in China

This paper studies the impact of an increase in higher education tuition on intergenerational mobility in China. We develop a theoretical model for the parental decision about the investment on education of children to illustrate the impact from the perspective of borrowing constraint. We consider the Chinese college tuition and subsidy reform around 1986 as a quasi-natural experiment for identifying the policy effect of the reform on intergenerational educational mobility by using the data from the census of 2000 and the China Family Panel Studies (CFPS). We find that an increase in the education burden induced by the reform of college tuition has reduced intergenerational educational mobility, and it is more noticeable in regions with a relatively higher increment in the tuition fee. Our results are robust with consideration of the co-residence bias, government investment in elementary education, and the higher education expansion.     

Distributional Effects of Public Education in an Economy with Public Pensions*

We study how the allocation of government expenditures between two major outlays—education and pay‐as‐you‐go social security—affects human capital distribution in an economy with heterogeneous agents. We consider an overlapping generations economy where the government maintains both programs, and allocates tax revenues to finance them. In our model, human capital is one of the factors of production. It is itself produced as a combined result of public inputs and private inputs. Parents' decisions to invest time and material resources in education of their children are motivated by altruism, heterogeneous in its strength across the population, which leads to heterogeneity of incomes. We investigate the effect of an increase in public funding for education on the human capital distribution. We show that in this framework, contrary to some earlier results, increased spending on public education may lead to higher inequality. Our results depend crucially on the interaction of education funding with the social security budget and on the elasticity of substitution in the learning technology.     

Education and the State

In the ethics-economy debate, money and credit have acquired growing significance. Moral judgements on some aspects of money and credit emerged particularly in the late medieval period when their development led the economic system towards capitalism. Scholarly Islamic and Christian analyses show that the evolution of money and credit may have triggered prejudices about the ethically-based rules underpinning the economy and society. Thought on the late medieval monetary and credit institutions highlight points of contact between Christian and Islamic ethical codes which are still of great interest, especially for the identification of a shared ethics going beyond business.     

Immigration, Unemployment and Pensions

This paper examines the impact of immigration on a host country with welfare state arrangements that support both the unemployed and the elderly. It is shown that low‐skilled immigration increases the unemployment rate. Furthermore, it harms the low‐skilled native population and benefits the high‐skilled natives and pensioners. Nevertheless, as under competitive labor markets, immigration generates an unambiguous gain for the native population as a whole. However, in contrast to the findings under full employment, this gain can be dampened by an expansion of the pension system.     

Pensions for Singles and Couples

Retirement policies often seek to set pensions at levels that enable single and married pensioners to have the same standard of living. The existing literature on consumer equivalence scales provides little assistance in reaching this policy objective, as the estimated scales are both imprecise and reliant upon strong and opaque assumptions. This paper proposes an alternative modeling strategy which has low data requirements and involves the use of detailed, but transparent, assumptions about the extent of joint consumption of particular commodities. These assumptions are embedded in an economic model of household consumption and combined with household expenditure data to calculate consumer equivalence scales. It is estimated that, in 2003–04, Australian couples of Age Pension age who owned their own home needed expenditures between 1.32 and 1.60 times that of a single person. These scales were lower than those used in the pension system.     

Intergenerational Mobility under Private vs. Public Education*

Intergenerational earnings mobility is analyzed in a model where human capital is produced using schooling and parental time. In steady states more mobile societies have less inequality, but in the short run higher mobility may result from an increase in inequality. Starting from the same inequality, mobility is higher under public than under private education. A rise in income shocks, for example due to increased returns to ability, or a switch from public to private schooling both increase inequality. However, increased shocks raise mobility in the short run and do not affect it in the long run, whereas an increased role for private schooling reduces mobility in both the short and long run. That these differences may help to identify the source of changes in inequality, and other real‐world implications, are illustrated in a brief discussion of time trends and cross‐country differences.     

The Economics of Pensions: A non-conventional approach

This paper examines two alternative pension systems, pay-as-you-go (PAYGS) and the capitalisation system (CS) in the light of alternative economic theories. It starts from a critical discussion of the insurance-fiction model of PAYGS proposed by Samuelson in 1958. The pros and cons of that model are illustrated by taking into consideration the non-orthodox views of Keynes, Lerner, Pechman, de Finetti and Eisner. Next, the paper investigates the relationship between CS and the marginalist capital theory. It is shown that, interpreted in a neoclassical framework, CS presents endogenous mechanisms of adjustment to demographic shocks. The problems of the transition between PAYGS and CS are then examined. The paper then discusses some main features of the current US policy debates on the Social Security system. Finally, the alleged advantages of a wider adoption of CS are criticised in the light of the Keynesian theory of effective demand reinforced by the Sraffian criticism of neoclassical capital theory.     

The Intergenerational Effects of Recessions

Several studies analyze the contemporaneous effects of recessions on individuals and their children. This paper shows that recessions also affect future offspring, not born yet. By linking fathers and offspring from the Panel Study of Income Dynamics, we find that a percentage-point increase in the national unemployment rate experienced by men between ages 16 and 20 reduces their future offspring's annual wages by 4 percent, occupational prestige by 3 percent, and education by 0.2 years. We then investigate the mechanisms explaining our findings.     

Pensions with endogenous and stochastic fertility

This paper studies the design of a pay-as-you-go social security system in an overlapping generations model where fertility is in part stochastic and in part determined through capital investment. If investments are publicly observable, pension benefits must be linked positively to the level of investment, and payroll taxes negatively to the number of children. The outcome is characterized by full insurance with all parents, regardless of their number of children, enjoying identical consumption levels. Without observability, benefits must increase, and payroll taxes decrease, with the number of children. The second-best level of investment, and the resulting average fertility rate, are less than their corresponding first-best levels.     

The Pensions Green Paper: A Generational Accounting Perspective

In this note we show how the policy proposals contained in the government's Green Paper on pensions (DSS, 1998) affect the long term sustainability of the UK's public finances and redistribution between current and future generations. Using the methodology of generational accounting we show that the proposals in the Green Paper will marginally increase the tax rise needed to ensure intertemporal solvency, and slightly worsen generational imbalances. The effect of implied changes in National Insurance Contributions, and the fiscal and generational implications of fully funding the proposed State Second Pension, are also discussed.     

代际旅游的内涵界定及表现形式

基于代际关系考虑的代际旅游是在我国家庭代际关系变迁和消费观念转变的背景下产生的,其存在具有绝对性,范围有其针对性,表现形式有亲子游、孝敬父母游、隔代游和大家庭旅游。     

The Intergenerational Overlap and Human Capital Formation*

A new microeconomic explanation for the divergent experiences of economies in forming human capital is proposed. It is suggested that the positive effect of a longer life expectancy on human capital formation arises from two separate effects: a life‐expectancy effect and a prolonged intergenerational overlap effect. It is argued that the duration of the overlap between generations and the associated parental support can affect the marginal cost of human capital formation and hence its level: parental support is cheaper than market financing. The strong correlation between the formation of human capital and life expectancy is thus attributed not merely to a higher marginal benefit arising from a longer payback period but also to a lower marginal cost arising from a prolonged intergenerational overlap. Conditions are provided under which a longer overlap results in a higher level of per capita output.     

研究生教育在国家创新体系中的地位与作用

国家创新体系是一个完整的开放体系,其基本功能是创新资源的优化配置和高效应用。研究生教育是国家创新体系的重要执行主体之一,明确其在国家创新体系中的地位与作用,有利于国家创新体系的构建和整体绩效的提高。