Pensions with heterogenous individuals and endogenous fertility

Helmuth Cremer, Firouz Gahvari, Pierre Pestieau

Research output: Contribution to journalArticlepeer-review


We study the design of pension schemes when fertility is endogenous and parents differ in ability to raise children. Pay-as-you-go schemes require, under perfect information, a marginal subsidy on fertility to correct for the externality they create, equal pensions, and contributions that increase or decrease with the number of children. Under asymmetric information, incentive-related distortions supplement the Pigouvian subsidy. These require an additional subsidy or an offsetting tax depending on whether the redistribution is towards people with more or with less children. In the former case, pensions are decreasing in the number of children; otherwise, they are increasing.

Original languageEnglish (US)
Pages (from-to)961-981
Number of pages21
JournalJournal of Population Economics
Issue number4
StatePublished - Oct 2008


  • Endogenous fertility
  • Pay-as-you-go social security
  • Redistribution

ASJC Scopus subject areas

  • Demography
  • Economics and Econometrics


Dive into the research topics of 'Pensions with heterogenous individuals and endogenous fertility'. Together they form a unique fingerprint.

Cite this