Are Family Allowances and Fertility-related pensions Siamese Twins?

Arbeitspapier

This paper discusses alternative ways to deal with the positive externalities of having children in a pay-as-you-go pension system. Family allowances are compared to introducing a fertility-related component into the pension formula. In an endogenous labor supply setting, both instruments are shown to be equivalent if general pensions are of the Bismarckian contribution-related type. In contrast, if general pensions are of the Beveridgean flat-rate type, making pensions contingent on the number of children is generally preferable to family allowances because the latter creates a larger tax load on labor supply.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1157

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Social Security and Public Pensions ; Fertility; Family Planning; Child Care; Children; Youth ; Demographic Economics: Public Policy
• Subject: pay-as-you-go pension ; child benefits ; fertility ; externalities

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fenge, Robert ; Meier, Volker
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/76652
• Last update: 10.03.2025, 11:44 AM CET