Education and the dynamics of family decisions

This paper investigates the extent to which a biased transmission of educational endowments affects fertility. To this end, we devise a version of Becker’s family decision model that takes preference change into account. Specifically, we model education as an instrument that increases the autonomy (to prefer), and autonomy as an instrument of preference-change for household-structures. The empirical validity of the proposed model is examined for the European setting using the European Community Household Panel. In the context of the model, empirical findings imply the following. On the one hand, both preference for quantity and preference for bequest for each offspring (quality) increases with education, while preference for current consumption decreases. On the other hand, education is found to be negatively correlated with fertility, at a decreasing rate. Therefore, the paper provides a useful additional toolkit for public policy evaluation. It explains how public policies oriented toward the guarantee of personal freedoms, such as the expansion of education and autonomy, are likely to guarantee the same freedoms for subsequent generations.

Social Security, Education, Retirement and Growth

In this paper we analyze the effects of social security policies in an unfunded, earnings-related social security system on the incentives to education investment and voluntary retirement, on growth and on income inequality. Growth is endogenously driven by human capital investment, individuals differ in their innate (learning) ability at birth, and the pension scheme includes a minimum pension. More skilled individuals spend more on education, minimum pensions reduce low skill individuals' incentives to invest in human capital, there is no monotonic relationship between per capita growth and income inequality.