Long-run implications of social security taxation for growth and fertility

This paper compares long-run implications for growth and fertility of four types of taxation for social security with positive bequests. A tax rise under lump-sum taxation enhances growth but lowers fertility, while other types of taxation do so under additional restrictions. A tax rise under consumption taxation is less likely to stimulate growth and to reduce fertility than under payroll taxation. Arise in an interest income tax raises fertility, reduces both savings and human capital investment, and hence is harmful for growth. The case with zero bequests is also discussed.