SOCIAL SECURITY, FERTILITY, AND SAVING.

摘要

The following conjectures suggest the tentative hypothesis that social security depresses fertility: First, the prospect of private giving from working children to retired parents provides a significant motivation for parents to have children. Second, a socialized system of intergenerational transfers substitutes for and replaces such private intergenerational giving.;The empirical section tests the hypothesis that social security depresses fertility in the United States by using aggregate annual data over the period 1933 to 1974. As the theoretical section of this thesis points out, households, when making their fertility and saving decisions, do not know the amount of social security benefits they will receive when they retire. Because expectations of future social security benefits are important, the analysis tests two separate assumptions. The first assumption is that couples have static expectations and that future social security benefits equal current benefits. The statistical results consistently support the hypothesis that social security depresses fertility. However, the estimated elasticities suggest that the importance of social security in determining fertility in the United States is small. The second assumption supposes that current and future benefits are not necessarily the same. The analysis uses Martin Feldstein's social security wealth variable as a proxy for future expected benefits. It seems reasonable to conclude that increases in current social security benefits decrease fertility, but the effect of future benefits on fertility is less clear.;The typical working couple, concerned for both their welfare and the welfare of their retired parents, maximize their utility by choosing the size transfer to give to their parents, the number of children to bear, and the amount to save for retirement. In making these decisions, the couple determines their lifetime consumption pattern and the consumption of their parents during retirement. This life-cycle model provides the basis for a general analysis of the effect of social security on private saving, private intergenerational giving, and fertility, and for an econometric investigation of the relation between social security, fertility, and private saving.