This paper compares the steady-state and dynamic outcomes of two historical alternatives as a means of old-age insurance, namely, voluntary intra-family transfers from young to old members versus pay-as-you-go public pensions, in a general equilibrium overlapping generations model with children as a desirable good. We show that the shift from a private system of old-age support to public pensions increases the gross domestic product (GDP) per worker. Moreover, although in both cases the steady-state stock of capital, under myopic expectations, may be (globally) unstable depending on the size of the inter-generational transfer, we show that the existence of public pensions rather than private intra-family gifts considerably reduces the possibility of cyclical instability.
|Autori interni:||FANTI, LUCIANO|
|Autori:||Fanti L; Gori L|
|Titolo:||Economic growth and stability with public PAYG pensions and private intra-family old-age insurance|
|Anno del prodotto:||2012|
|Digital Object Identifier (DOI):||10.1016/j.rie.2012.04.003|
|Appare nelle tipologie:||1.1 Articolo in rivista|