Social security in a non-altruistic model with uncertainty and endogenous fertility

The effect of social security on fertility and saving is analyzed within a non-altruistic model of intergenerational transfers, both in the absence and in the presence of a perfect capital market. Fertility is reduced by a budget balanced increase in social security if the individuals have a high degree of risk aversion. Savings are unambiguously increased by an expansion of social security, while the effect of a deficit-financed expansion of the social security system on saving and fertility depends on the characteristics of the policy package considered.