SOCIAL-SECURITY IN A NON-ALTRUISTIC MODEL WITH UNCERTAINTY AND ENDOGENOUS FERTILITY

The effect of social security on fertility and saving is analyzed with in a non-altruistic model of intergenerational transfers, both in the absence and in the presence of a perfect capital market. Fertility is reduced by a budget balanced increase in social security if the indivi duals have a high degree of risk aversion. Savings are unambiguously i ncreased by an expansion of social security, while the effect of a def icit-financed expansion of the social security system on saving and fe rtility depends on the characteristics of the policy package considere d.