Social Security and Growth in an Altruistic Economy

Posted: 3 Jun 2003

See all articles by Berthold U. Wigger

Berthold U. Wigger

University of Mannheim - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Abstract

This paper studies the macroeconomic impact of private and public intergenerational transfers in the presence of endogenous growth. It focuses on two-sided altruism implying that individuals have both a motive to make gifts to their parents and a motive to leave bequests to their children. The growth effects of social security depend on whether children are making gifts to their parents or parents are leaving bequests to their children. Which of the transfers is operative, in turn, depends on the size of social security benefits. Social security is legislated endogenously. The introduction of a social security program which definitely reduces per capita income growth and harms future generations is contemplated by altruistic individuals even if non-altruistic individuals disapprove it.

Suggested Citation

Wigger, Berthold U., Social Security and Growth in an Altruistic Economy. Available at SSRN: https://ssrn.com/abstract=308984

Berthold U. Wigger (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany
+49 621 181 1797 (Phone)
+49 621 181 1794 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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