A pay-as-you-go pension scheme is associated with positive externalities of having children and providing them with … human capital. In a framework with heterogeneity in productivity, and stochastic and endogenous investment in fertility and … displays both a benefit contingent on the contributions of children and a purely fertility-related component …

the pensions out. In a model with endogenous fertility the paper first confirms the sub-optimality of parent’s choices and … recommends an intergenerationally balanced childcare subsidy to correct for the externalities in a PAYG system. However, if PAYG … importantly, just by exploiting the above mentioned externalities keeping the Pareto conditions intact. This phase out plan under …