TITLE:
Multiple Equilibria between Fertility Rates and Pension Levels Based on the Target Level of Government Debt
AUTHORS:
Hideki Nakamura, Masaya Yasuoka
KEYWORDS:
Fertility, Pensions, Target Level of Government Debt, Multiple Equilibria
JOURNAL NAME:
Theoretical Economics Letters,
Vol.1 No.3,
November
3,
2011
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.