Standard homo economicus lives in a world of complete markets and maximizes utility which is a function of his personal consumption. This approximation cannot account for parents making transfers to adult children, children taking care of old parents, nor for gifts, inheritance and many other...

We propose a model of parental altruism in relation with child habit formation, where children are unaware of their developing habits while young, and become cognizant of them only on growing up. We show that an altruistic mother (i) maintains the amount of income transferred to her child lower...

This paper examines the distributional characteristics of parametric reforms carried out when a planner faces an unexpected adverse shock to the pay-as-you-go system. When transfers are used to balance the system, we show that, even if the planner chooses a Ponzi scheme in the face of permanent...

This chapter examines the scope for mutually beneficial intergenerational cooperation, and looks at various attempts to theoretically explain the emergence of norms and institutions that facilitate this cooperation. The contributions reviewed come from branches of economics as far apart as...

The worldwide problem with pay-as-you-go, defined-benefits social security systems is not just financial. Through a dynamic, overlapping-generations model where forming a family and bearing and educating children are choice variables, we show that social security taxes and benefits generate...

I analyze the inter-vivos transfers and bequest decisions of 700,000 individuals during a period when the decision-maker receives negative news regarding life expectancy. The event that initiates the news is a health outcome. Expected mortality increases both the likelihood of transferring...

In this paper I use a multi-period OLG model to study how a demographic shock is distributed among different generations. In particular, I investigate whether a funded pension system allows for a smoother adjustment than an unfunded system. The results suggest that the answer to this question...