JOURNAL OF POPULATION ECONOMICS

Germany (Heidelberg) 89

1995 - VOLUME 8, NUMBER 1

96.89.1 - English - Rebecca M. BLANK, Northwestern University, Department of Economics, 2003 Sheridan Road, Evanston, IL 60208 (U.S.A.)

Changes in inequality and unemployment over the 1980s. Comparative cross-national responses (p. 1-21)

This paper reviews the research evidence regarding high and persistent unemployment in the western European nations and widening inequality in the United States and selected European countries. It has been suggested that both of these problems are due to fundamental economic shifts in labor demand within the more industrialized world that have led to declines in the demand for less skilled workers: The effect on countries with more regulated labor markets was rising unemployment, while in less regulated labor markets it was rising wage inequality. The paper considers the evidence for this hypothesis, as well as the research questions and policy issues that it raises. (EUROPE, UNITED STATES, UNEMPLOYMENT, WAGES, COMPARATIVE ANALYSIS)

96.89.2 - English - JosŽ Edgardo L. CAMPOS, Country Economics Department, World Bank, Washington, D.C. 20433 (U.S.A.), and Donald LIEN, Economics Department, University of Kansas, Lawrence, KS 66045 (U.S.A.) Political instability and illegal immigration (p. 23-33)

Economic theory suggests that transnational migration results from the push-pull effect of wage differentials between host and source countries. In this paper, we argue that political instability exacerbates the migration flow, with greater instability leading to relatively larger flows. We conclude then that an optimal solution to the illegal immigration problem requires proper coordination of immigration and foreign policies by the host country. A narrow preoccupation with tougher immigration laws is wasteful and may be marginally effective. (MIGRATION POLICY, ILLEGAL IMMIGRATION)

96.89.3 - English - C. Y. Cyrus CHU and Huei-Chung LU, Department of Economics, National Taiwan University, 21 Hsu Chow Road, Taipei (Taiwan) Toward a general analysis of endogenous Easterlin cycles (p. 35-57)

Easterlin believed that there were two features associated with the birth cycles he observed: the cycles were related to the labor market, and they might be self-generating. This paper tries to set up a model that contains both of these two features. We suppose that the welfare of various age-specific cohorts are determined by their respective marginal productivity, and that the underlying technology which puts together labor force of various age-specific cohorts can be characterized by a general production function. Under these weak assumptions, we show that the well-analyzed cohort and period models along the lines of Lee (1974) are restricted versions of our general setting. Given that both the cohort model and the period model were rejected by statistical tests, we adopt the coefficient values obtained from the estimation of the unrestricted version to perform the bifurcation analysis. We go beyond the previous study which focused upon the possible existence of limit cycles, and show that the U.S. fertility limit cycle solution is unstable. Therefore the population trajectory will never converge to that limit cycle. (ECONOMIC DEMOGRAPHY, BUSINESS CYCLES, FERTILITY)

96.89.4 - English - Alexia PRSKAWETZ, Institute for Demography, Hintere Zollamtsstrasse 2B, A-1033 Vienne (Austria), and Gustav FEICHTINGER, Institute for Econometrics, Technical University, Argentinierstrasse 8/119, A-1040 Vienne (Austria)

Endogenous population growth may imply chaos (p. 59-80)

We consider a discrete-time neoclassical growth model with an endogenous rate of population growth. The resulting one-dimensional map for the capital intensity has a tilted z-shape. Using the theory of nonlinear dynamical systems, we obtain numerical results on the qualitative behaviour of time paths for changing parameter values. Besides stable and periodic solutions, erratic time paths may result. In particular, myopic and far-sighted economies - assumed to be characterised by low and high savings rate respectively - are characterised by stable per capita capital stocks, while solutions with chaotic windows exist between these two extremes. (POPULATION GROWTH, ECONOMIC MODELS)

96.89.5 - English - Assaf RAZIN, Eitan Berglas School of Economics, Tel Aviv University, Tel Aviv (Israel), and Chi-Wa YUEN, Department of Economics, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon (Hong Kong)

Utilitarian tradeoff between population growth and income growth (p. 81-87)

Utilitarian social welfare functions were devised for a world with a fixed population. With endogenous population, Edgeworth conjectured that the Benthamite principle of maximizing total utility (classical utilitarianism) would lead to a larger population size and a lower standard of living than the Millian principle of maximizing per capita utility (average utilitarianism). One objection to the Benthamite criterion was that its application to a world with finite resources often implied large population size in conjunction with an 'embarrassingly low' average standard of living. In a static environment with altruistic parents, this may not be warranted. In a growth situation, this criticism is even less likely to be supported. This paper extends the comparison of classical and average utilitarianism from a static to a dynamic and endogenously growing economy. Using a stylised endogenous growth framework, it confirms that the Benthamite population growth rate exceeds the Millian growth rate. In terms of the rate of growth of per capita income, the reverse is true. Having the standard of living often increasing under the Benthamite criterion, our results thereby depart significantly from 'the repugnant conclusion' levelled against classical utilitarianism. (POPULATION GROWTH, ECONOMIC THEORY, STANDARD OF LIVING)

96.89.6 - English - Jan H. M. NELISSEN, Tilburg University, Department of Social Security Studies, P.O. Box 90153, 5000 LE Tilburg (Netherlands) Lifetime income redistribution by social security (p. 89-105)

This paper discusses the redistributive impact of the Dutch social security system on lifetime basis. Net benefits appear to be positive for the birth generations up to 1960. Social insurances show a declining net benefit, whereas for occupational pensions the reverse holds. It is generally assumed that flat-rated social security schemes are more redistributive ones than wage-related schemes. However, the Dutch social security system shows that on a lifetime basis the redistributive impact of flat-rated general insurances does not necessarily largely differ from the wage-related employee insurances. Social assistance schemes result in a very large income redistribution in view of the small amounts involved. Social insurances and social assistance schemes have an income equalizing effect. On the contrary, occupational pensions increase income inequality. (NETHERLANDS, SOCIAL SECURITY, INCOME REDISTRIBUTION)

1995 - VOLUME 8, NUMBER 2

96.89.7 - English - Friedrich BREYER, FakultŠt fŸr Wirtschaftswissenschaften und Statistik, UniversitŠt Konstanz, Postfach 5560 D 135, D-78434 Konstanz (Germany) The political economy of rationing in social health insurance (p. 137-148)

Due to the rapid progress in medical technology social insurance systems will soon no longer be able to grant health services without limits but must employ non-price rationing devices. This raises the question how these limits will be determined. Here we consider a direct democracy where the size of the social health insurance plan is determined in a popular referendum using simple majority rule. Moreover, two different kinds of rationing are distinguished according to whether additional private purchases of health care are allowed. For both systems we examine the size of the social insurance system in a political equilibrium, and we compare the results in particular with respect to their distributional effects. (ECONOMIC THEORY, SOCIAL SECURITY)

96.89.8 - English - Sjur Didrik FL?M and Alf Erling RISA, University of Bergen, Department of Economics, Fosswinckelsgt. 6, N-5007 Bergen (Norway) Market insurance, social insurance and education (p. 149-160)

We show that social disability insurance may better society-wide welfare even when there is a perfect private market for similar insurance. In essence, the public system complements the private. The latter cover risks when personal characteristics are known, whereas the first mitigates effects of unfavorable characteristics. Large social insurance benefits will induce more education among agents with expected good health. These same agents also experience a negative redistributive income effect from social insurance. Incentive effects to redistribution are therefore nonstandard since individuals that are adversely affected by redistribution will respond with more educational vigor. (ECONOMIC THEORY, SOCIAL SECURITY, LEVELS OF EDUCATION)

96.89.9 - English - Wolfgang PETERS, Department of Economics, University of Bonn, Adenauerallee 24-42, D-53113 Bonn, and Department of Economics, University of Regensburg, D-93040, Regensburg (Germany) Public pensions, family allowances and endogenous demographic change (p. 161-183)

In addition to an old-age insurance system which redistributes income from the young to the old, family allowances build a further redistributive system which typically favors younger and burdens older generations. Family allowances have two main tasks: first, child allowances offer an incentive for child-bearing which influences fertility in an economy. Second, subsidies which ease the financial burden of a child's education guarantee a higher average level of productive skills and therefore enhance net domestic product. If individual demand for having and educating children leads to an impact on the economic system as a whole, we have external effects. In such a case, corrective taxation (Pigouvian tax) should be considered. (ECONOMIC THEORY, FAMILY ALLOWANCES)

96.89.10 - English - Christian SEIDL, UniversitŠt Kiel, Institut fŸr Finanzwissenschaft und Sozialpolitik, Olshausenstrasse 40, D-24098 Kiel (Germany) The desire for a son is the father of many daughters. A sex ratio paradox (p. 185-203)

This paper investigates the impact of preferences for male offspring to female offspring upon the sex ratio of the population. Asymmetric procreation behaviour of this kind is modelled by assuming that a female's procreation ceases only after at least one son or n daughters are born. It is shown that such asymmetric procreation behaviour has no effect on the sex ratio of the society, but influences rather the growth rate of the population. Finally, problems concerning the interrelationship between the sex ratio, the pattern of procreation, and the marriage regime in stationary populations are investigated. (SEX PREFERENCE, SEX RATIO, POPULATION GROWTH)

96.89.11 - English - Robert K. von WEIZS€CKER, Martin-Luther-UniversitŠt, Wirtschaftswissenschaftliche FakultŠt, Lehrstuhl Volkswirtschaftslehre, Grosse Steinstrasse 73, D-06099 Halle (Germany), and CEPR, Londres (U.K.) Public pension reform, demographics, and inequality (p. 205-221)

Starting from a simple, descriptive model of individual income, an explicit link between the age composition of a population and the personal distribution of incomes is established. Demographic effects on income inequality are derived. Next, a pay-as-you-go financed state pension system is introduced. The resulting government budget constraint entails interrelations between fiscal and demographic variables, causing an additional, indirect demographic impact on the distribution. This is shown not only to change, but in some cases even to reverse the distributional incidence of an aging population. Several policy conflicts arise. The point is re-emphasized by an analysis of the German Pension Reform Act of 1992. The study reveals that the design of the pension formula decisively drives the relation between demographics and inequality. (GERMANY, ECONOMIC DEMOGRAPHY, RETIREMENT PENSIONS, INCOME DISTRIBUTION)

1995 - VOLUME 8, NUMBER 3

96.89.12 - English - James R. WALKER, Center for Demography and Ecology, University of Wisconsin-Madison, Madison, WI 53706, and National Bureau of Economic Research, Cambridge, MA 02139 (U.S.A.)

The effect of public policies on recent Swedish fertility behavior (p. 223-251)

In the literature the recent upsurge in period birth rates is seen as evidence of a pronatalist effect of Sweden's extensive social insurance programs. Yet, these explanations can not account for the downturn in birth rates in the 1970s, the delay in childbearing, and the constancy of cohort birth rates which characterize recent Swedish fertility behavior. To summarize the effect of Sweden's economic and policy environment on the observed fertility patterns, the author uses a neoclassical economic framework to develop the shadow price of fertility. Although strong simplifying assumptions are imposed, the estimated price series exhibit a negative relationship with period fertility rates and the change in the estimated relative prices of fertility over the life cycle lend modest support for the delayed childbearing. (SWEDEN, ECONOMIC DEMOGRAPHY, FERTILITY TRENDS, FERTILITY DETERMINANTS)

96.89.13 - English - Gordon G. LIU, Department of Pharmaceutical Economics and Policy, University of Southern California, 1540 E Alcazar Street, Los Angeles, CA 90033 (U.S.A.) An economic analysis of pregnancy resolution in Virginia: Specific as to race and residence (p. 253-264)

This study analyses an economic model of pregnancy resolution; that is, a model of the choice by a pregnant woman to abort her fetus or carry it to term. This analysis, using an analytical model derived from the household utility framework, adds to previous research by presenting race and residence specific estimates of how individual characteristics, history of abortion, and the community-based factors determine women's choices of giving birth vs. abortion. The main data for estimating the model were drawn from the 1984 vital statistics of all induced abortions and live births in the Commonwealth of Virginia. The major findings indicate that low parental education, high maternal age, previous early abortions, and the availability of abortion providers all significantly reduce the probability of choosing the live birth option. Married status and the availability of family planning clinics significantly increase the probability of the live birth option. The findings also suggest that women's choices between abortion and live birth vary substantially with race (white vs. black) and residential (urban vs. rural) location. (UNITED STATES, ECONOMIC DEMOGRAPHY, PREGNANCY, LIVE BIRTHS, INDUCED ABORTION)

96.89.14 - English - Cruz A. ECHEVARRêA, Departamento de Fundamentos del An‡lisis Econ—mico (Teor'a Econ—mica) e Instituto de Econom'a Pœblica, Universidad del Pa's Vasco, Avda. Lehendakari Aguirre 83, E-48015 Bilbao (Spain)

On age distribution of population, government expenditure and fiscal federalism (p. 301-313)

In this paper the author builds a simple model to analyze the consequences that population growth imposes on the relative needs of expenditure of goverwnents in a fiscal federalism setup. He assumes, first, that some government expenditure items can be classified according to the age of their recipient individuals and, second, that different levels of government are usually assigned different expenditure programs. The implication is that, for an initially given level of effective public good provision, changes in the size of population as well as in its age structure will influence the composition of public expenditure for different layers of administration in a different manner. (ECONOMIC DEMOGRAPHY, PUBLIC EXPENDITURES, AGE DISTRIBUTION, TAXATION)

96.89.15 - English - Kai A. KONRAD, Department of Economics, Free University of Berlin, Boltzmannstrasse 20, D-14195 Berlin (Germany) Social security and strategic inter-vivos transfers of social capital (p. 315-326)

This paper explains public provision of social capital in an overlapping generations model with 'gerontocracy', without resort to any bequest motive. The old generation has an incentive to provide education and infrastructure because these goods shift the Laffer curve of social security taxation, thereby increasing old-age income in the political equilibrium. The incentive is stronger if population growth is larger. The marginal productivity of social capital in the political equilibrium may exceed or fall short of the marginal productivity of social capital in an efficient allocation. (ECONOMIC DEMOGRAPHY, SOCIAL SECURITY)

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