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Europe’s Demographic Deficit A Plea For A Child Pension System

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This paper considers the economic implications of the stalling birth rates and demographic development in Europe. To remedy for this it proposes a child pension system. This system allows additional pension facilities depending on the number of children raised. It should be a PAYG pension financed with an income tax. The main motivation for this is that parents have invested resources which also benefit society.

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Correspondence to Hans-Werner Sinn.

Additional information

18th Tinbergen Lecture, Amsterdam, October 22, 2004

Ifo Institute for Economic Research at the University of Munich.

I am grateful to Lans Bovenberg and Peter Cornelisse for useful conversations about the Dutch pension system and Tinbergen’s views on children and pensions. I thank Robert Koll, Regina von Hehl and Elsita Walter for careful research assistance, and Tobias Seidel, Michael Stimmelmayr, Martin Werding and Markus Zimmer for useful comments.

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Sinn, H. Europe’s Demographic Deficit A Plea For A Child Pension System. De Economist 153, 1–45 (2005).

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  • pension system
  • birth rate
  • human capital
  • demography