The Health Implications of Social Pensions: Evidence from China’s New Rural Pension Scheme* This paper estimates the causal effect of income on health outcomes of the elderly and investigates underlying mechanisms by exploiting an income change induced by the launch of China’s New Rural Pension scheme (NRPS). Using this policy experiment, we address the endogeneity of pension income by applying...

Why Do Most Italian Young Men Live With Their Parents? Intergenerational Transfers and Household Structure* More than 80% of Italian men aged 18-30 live with their parents. We argue that one contributing factor to this remarkably high rate of cohabitation is parents’ tastes for co-residence. In order to investigate the role of parental preferences, we estimate the effect of exogenous changes in...

In a number of developing countries, an important part of the economy is informal both in terms of production and of social protection. In this paper we consider introducing a universal pension system in the formal sector. It is shown to have two main effects: first, it makes the formal sector more attractive to migration and second, it affects capital accumulation in a way which depends on the...

We examine the dynamic interaction of the population age structure, economic dependency, and fertility, paying particular attention to the role of intergenerational transfers. In the short run, a reduction in fertility produces a “demographic dividend” that allows for higher consumption. In the long run, however, higher old-age dependency can more than offset this effect. To analyze these dynam...

In this paper we identify conditions under which the introduction of a pay-as-you-go social security system is ex-ante Pareto-improving in a stochastic overlapping generations economy with capital accumulation and land. We argue that these conditions are consistent with many calibrations of the model used in the literature. In our model financial markets are complete and competitive equilibria ...

This paper analyzes Singapore’s multi-pronged approach to managing prolonged low fertility which has led to population aging, labor force shortages, increasing elderly dependency ratios, and feminization of the elderly population. This approach has emphasized high growth, and has given priority to becoming an attractive business location over providing adequate and equitable retirement and heal...

We investigate the welfare implications of a pay as you go (PAYG) social security system in a dynastic framework in which agents have self-control problems. Unlike the previous studies, we incorporate altruism and temptation into our analysis. The presense of these two additional factors affects agents’ intertemporal decision problems in two opposite directions. That is, on the one hand agents ...

We assess the impact of continued low fertility in China, versus a rebound in fertility due to the relaxation of the one child policy, on demographic and macroeconomic outcomes in a dynamic general equilibrium framework. We build a rich model of household dynamics with young and elderly dependents, human capital investment, public health insurance, pensions, private savings, and intrafamily tra...

We formulate an overlapping generations model with skill heterogeneity and productive and non-productive government programs to study the macroeconomic and intergenerational welfare effects caused by risk premium shocks and government debt reductions. We demonstrate that in a small open economy with a high level of debt-to-GDP ratio a small increase in the risk premium leads to substantial outp...

This paper carries out a critical reappraisal of the two contending theories purporting to explain long-run government spending: Wagner’s Law and different variants of the ratchet effect. We analyze data spanning from the early 19 th century until the present day in Sweden and the United Kingdom. Hence, in contrast to previous studies, we evaluate the validity of Wagner’s Law and the ratchet ef...