Pay-as-You-Go Social Security and Educational Subsidy in an Overlapping Generations Model with Endogenous Fertility and Endogenous Retirement

Abstract This study analytically investigates the effects of pay-as-you-go social security and educational subsidies on fertility rate, retirement age, GDP per capita growth rate in an overlapping generations model, where parents invest resources toward their children’s human capital. We find that old agent retires fully when his or her labor productivity is low later high. Under unique balanced-growth-path (BGP) equilibrium, still engaged work, tax rates are neutral to higher encourage him retire earlier, a depresses for can accelerate growth. However, retires, increase lowers boosts Additionally, if agent’s increases, also increases. conduct numerical simulations analyze how affects under BGP equilibrium.