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Multiple Equilibria between Fertility Rates and Pension Levels Based on the Target Level of Government Debt
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Theoretical Economics Letters·Volume 01 (2011)·Pages 95–98·Published 3 November 2011·DOI10.4236/tel.2011.13020
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Abstract
We show that when the government has a target debt level, multiple equilibria exist in the relationship between fertility rates and pension levels. One is associated with a high fertility rate and a high pension level. The other is associated with a low fertility rate and a low pension level. If the government fails to provide adequate security for individuals during their retirement years, it would result in a failure of coordination between the government and individuals.
KeywordsFertilityPensionsTarget Level of Government DebtMultiple Equilibria
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