Intergenerational Mobility and Policy in an Aging Population

In an aging society, income inequality persists as a severe social problem. Many factors bring about income inequality. Our paper presents consideration of intergenerational mobility and income inequality. Children can not obtain an education investment from their parents if the parents are poor. However, children that are reared by rich parents have a high probability of becoming skilled workers because of sufficient education investment without expending a large amount of effort. Not only education subsidies, but also postponing retirement timing and an increase in pension benefit increase the effort to become a skilled laborer. Therefore the intergenerational mobility from poor to the rich is increased. This paper presents an examination of the effects of an aging population on intergenerational mobility.