This paper analyses the effects of rumours and changes in life expectancy in an economywith endogenous fertility and pay-as-you-go (PAYG) pensions. We show that the endogeneity of fertility makes society vulnerable to both pessimistic beliefs and an increasing life span. On the one hand, rumours...

In this paper we address the question whether in case of population ageing a transition from an unfunded to a more funded pension scheme is politically feasible in a representative democracy. We consider two parties: a right-wing party which is willing to trade off intragenerational equity...

This paper analyses the relation between public pensions, fertility and child care in a closed economy OLG-model with endogenous fertility. It it shown that it is optimal to introduce child allowances if the government redistributes income from the young to the old, and rises when longevity...

In this paper we investigate the effects of subsidizing low-skilled, labour-intensive services hired by high-skilled individuals in the presence of labour income taxation. Whether such a subsidy can be Pareto-improving depends crucially on the degree of substitutability of both types of labour...

This paper focuses on the effect that population ageing has on the production structure of the economy and consequently on economic growth. We consider an economy that consists of a service sector and a commodity sector. Productivity growth only occurs in the latter sector and is assumed to...

This paper analyses the consequences of a switch to a more funded pension scheme for economic growth in an economy that consists of a capital-intensive commodity sector with endogenous growth and a labour-intensive services sector. The increased savings cause long-run growth to be higher in a...