The old age security hypothesis and optimal population growth

Research output: Contribution to journalArticlepeer-review


The old age security approach is used to study the relationship between the rate of growth of the population and capital accumulation, within a Samuelson-Diamond overlapping generations framework. It is shown that a decentralized economy will fail, in general, to achieve the Pareto optimal path. However, a pay-as-you-go social security scheme in which the old get transfers which are proportional to the number of their children may restore optimality. On the other hand, child support systems or subsidies to capital can guarantee the optimal capital: labor ratio, but not the optimal population growth rate, while a lump sum social security system can guarantee the optimal population growth rate, but not the optimal capital: labor ratio. Finally, in a monetary economy any policy aimed at correcting the interest rate will restore full optimality.

Original languageEnglish
Pages (from-to)285-301
Number of pages17
JournalJournal of Population Economics
Issue number4
StatePublished - Mar 1989
Externally publishedYes

ASJC Scopus subject areas

  • Demography
  • Economics and Econometrics


Dive into the research topics of 'The old age security hypothesis and optimal population growth'. Together they form a unique fingerprint.

Cite this