ISBN: 3540432965
TITLE: Public Pensions and Economic Growth
AUTHOR: Wigger
TOC:

1. Introduction 1
2. Public Pensions and Economic Growth: The Basic Framework 5
2.1. The Analytical Elements 7
2.1.1. The Individuals 7
2.1.2. The Firms 10
2.1.3. The Public Pension Program 11
2.1.4. The Competitive Equilibrium 12
2.2. Productivity Growth 13
2.3. Allocative Efficiency 19
2.4. Public Pension Reform 25
Appendix 2 30
3. The Allocative Role of Intergenerational Transfers in Endogenous Growth Economies 33
3.1. Investment Externalities, Intergenerational Transfers, and Pareto-improvements 35
3.1.1. A Subsidy to Private Savings 35
3.1.2. A Pareto-Improving Policy 38
3.2. The Length of the Working Life 44
3.2.1. A Two-Period Model without Retirement 45
3.2.2. A Three-Period Model with Retirement 50
3.3. Endogenous Innovation 54
3.4. Human Capital Formation 56
3.4.1. Externalities from Human Capital Formation 56
3.4.2. An Optimal Public Pension Scheme 63
Appendix 3 68
4. Public versus Private Intergenerational Transfers 71
4.1. Dynastic Altruism 74
4.2. Gifts, Bequests, and Growth 81
4.3. When Are Private Intergenerational Transfers Operative? 83
4.4. Old-Age Security and Neutrality 87
4.5. Legislating Public Pensions (I) 91
4.5.1. The Political Equilibrium 91
4.5.2. An Intergenerational Conflict 96
4.5.3. The Role of Population Growth 99
4.5.4. Concluding Remarks 101
Appendix 4 104
5. The Family as an Old-age Security Device 111
5.1. A Twofold Fertility Motive 114
5.2. The Interplay between Productivity Growth and Fertility 118
5.2.1. Operative Intrafamily Transfers 119
5.2.2. Productivity Growth 122
5.2.3. Fertility 123
5.2.4. The Economy's Growth Factor 126
5.3. Legislating Public Pensions (II) 129
5.3.1. The Political Equilibrium 129
5.3.2. Reduced Joy of Having Children 136
5.3.3. A Numerical Example 137
Appendix 5 139
6. Summary 147
List of Symbols 151
References 155
Author Index 161
Subject Index 163
END
