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Intergenerational Transfers and Demographic Transition

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  • K Blackburn
  • G P Cipriani

Abstract

This paper presents an analysis of demographic transition based on the endogenous evolution of intergenerational transfers along an economy's endogenous path of development. Two-period-lived agents belonging to overlapping generations choose optimally their desired levels of consumption and fertility, together with their desired sizes of transfers to both parents and children. Parents are more efficient than children in producing output, but some parental time must be devoted to child-rearing. At low levels of development, fertility is high and the flow of net intergenerational transfers is from the young to the old. At high levels of development, fertility is low and the flow of net transfers is from the old to the young. These results accord strongly with empirical observations and the analysis may be seen as formalising, for the first time, a long-standing and well-respected hypothesis in the demographic transition literature.
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Suggested Citation

  • K Blackburn & G P Cipriani, 2002. "Intergenerational Transfers and Demographic Transition," Economics Discussion Paper Series 0218, Economics, The University of Manchester.
    • Handle: RePEc:man:sespap:0218
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    Cited by:

    1. Adriana Carolina Silva Arias & Patricia Gonzalez Román, 2007. "Una revisión a la composición y transición demográfica," Revista Facultad de Ciencias Económicas, Universidad Militar Nueva Granada, December.
    2. Varvarigos, Dimitrios, 2020. "Upward-Flowing Intergenerational Transfers in Economic Development: The Role of Family Ties and their Cultural Transmission," MPRA Paper 101002, University Library of Munich, Germany.
    3. Schäfer, Andreas & Valente, Simone, 2011. "Habit Formation, Dynastic Altruism, And Population Dynamics," Macroeconomic Dynamics, Cambridge University Press, vol. 15(3), pages 365-397, June.
    4. Takaaki Aoki & Kazuo Nishimura, 2017. "Global convergence in an overlapping generations model with two-sided altruism," Journal of Evolutionary Economics, Springer, vol. 27(5), pages 1205-1220, November.
    5. Andreas Schäfer, 2005. "The Interaction Between Endogenous Fertility And Inequality In The Political Economy," Manchester School, University of Manchester, vol. 73(4), pages 522-541, July.
    6. Luca Pensieroso & Alessandro Sommacal, 2019. "Agriculture to Industry: the End of Intergenerational Coresidence," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 34, pages 87-102, October.
    7. Atsue Mizushima & Keiichi Koda, 2007. "Risk Sharing and Growth in the Gifts Economy," Discussion Papers in Economics and Business 07-02, Osaka University, Graduate School of Economics.
    8. Brezis, Elise S. & Ferreira, Rodolphe Dos Santos, 2016. "Endogenous Fertility With A Sibship Size Effect," Macroeconomic Dynamics, Cambridge University Press, vol. 20(8), pages 2046-2066, December.
    9. Aoki, Takaaki, 2008. "On the Implications of Two-way Altruism in Human-Capital-Based OLG Model," MPRA Paper 12492, University Library of Munich, Germany.
    10. Yoshitaka Koda & Manachaya Uruyos, 2015. "Altruism and four shades of family relationships," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 345-365, December.
    11. Mizushima, Atsue, 2009. "Intergenerational transfers of time and public long-term care with an aging population," Journal of Macroeconomics, Elsevier, vol. 31(4), pages 572-581, December.
    12. Javier Olivera, 2013. "Old-age Support and Demographic Transition in Developing Countries. A Cultural Transmission Model," Working Papers 201307, Geary Institute, University College Dublin.
    13. Varvarigos, Dimitrios, 2021. "Upstream intergenerational transfers in economic development: The role of family ties and their cultural transmission," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    14. Jianchoun Dou, 2021. "Variety, Fertility, and Long-term Economic Growth," LIDAM Discussion Papers IRES 2021020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    15. Aoki Takaaki, 2011. "On the Implications of Two-Sided Altruism in Human Capital Based OLG Model," Asian Journal of Law and Economics, De Gruyter, vol. 2(2), pages 1-40, July.
    16. Luciano Fanti, 2012. "Endogenous labour supply, habits and aspirations," Discussion Papers 2012/144, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    17. Sugawara, Kouki, 2010. "Intergenerational transfers and fertility: Trade-off between human capital and child labour," Journal of Macroeconomics, Elsevier, vol. 32(2), pages 584-593, June.
    18. Pensieroso, Luca & Sommacal, Alessandro, 2014. "Economic development and family structure: From pater familias to the nuclear family," European Economic Review, Elsevier, vol. 71(C), pages 80-100.

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