Nerlove, Marc. <br/><br/>
A Bequest-Constrained Economy:  Welfare Analysis / 
Marc Nerlove, Assaf Razin, Efraim Sadka. 
 - Cambridge, Mass.  National Bureau of Economic Research  1988. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w2779 .
 - Working Paper Series (National Bureau of Economic Research)  no. w2779. .
<br/><br/> December 1988. 
<br/><br/> Bequest constraints have played a major role in discussions of debt neutrality but their welfare implications were not sufficiently dealt with in the literature. In this paper we focus on the welfare implications of bequest constraints. We found that when institutional constraints to the transfer of resources from children to their parents exists the welfare of the parents' generation may be improved by an old age security scheme. Such a scheme is justified not by income redistribution consideration, as is typically the case, but rather on pure efficiency grounds. Due to its intergenerational transfer role the social security scheme is Pareto-improving with altruistic parents if, in addition, the real income effect which tends to raise children consumption is relatively strong. 
<br/><br/>
<br/><br/><br/>System requirements: Adobe [Acrobat] Reader required for PDF files. <br/>Mode of access: World Wide Web.