Regional Agglomeration and Social Security Policies in OLG Model
This chapter presents construction of a simple overlapping generations model (OLG model) that includes multiplicate regions or nursing care probability. Using it, we analyze how social security policies affect regional agglomeration or dispersion. The declining fertility and the progress of aging in Japan present the most severe situation in the world. Therefore, it is extremely important, even urgent, for countries facing declining fertility and aging society to adopt policies to overcome such issues. We analyze the effect of central government’s social security policy on the population distribution between regions. Results show that per-capita capital accumulation at the steady state depends in this model on a tradeoff among saving effects, migration effects, and fertility effects.
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