The Political Economy of Intergenerational Cooperation

39 Pages Posted: 18 Jan 2006

See all articles by Alessandro Cigno

Alessandro Cigno

Department of Economics and Management, University of Florence; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics; Centre for Household, Income, Labour and Demographic Economics (CHILD)

Date Written: December 2005

Abstract

The paper examines the scope for mutually beneficial intergenerational cooperation, and looks at various attempts to theoretically explain the emergence of norms and institutions that facilitate this cooperation. After establishing a normative framework, we examine the properties of the laissez-faire solution in a pure market economy, and in one where reproductive decisions and intergenerational transfers are governed by self-enforcing family constitutions. We then show that first and second-best policies include a pension and a child benefit scheme. Finally, we look at the possibility that intergenerational redistribution might be supported by either a constitution, or some kind of voting equilibrium.

Keywords: intergenerational cooperation, family, fertility, saving, private transfers, education, child benefits, pensions, self-enforcing constitutions, direct democracy, representative democracy, constitutions

JEL Classification: D7, D82, D91, H2, H31, H5, I2, J1

Suggested Citation

Cigno, Alessandro, The Political Economy of Intergenerational Cooperation (December 2005). CESifo Working Paper Series No. 1632, Available at SSRN: https://ssrn.com/abstract=876549 or http://dx.doi.org/10.2139/ssrn.876549

Alessandro Cigno (Contact Author)

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