The aim of the paper is to investigate how child allowances affect population growth and pension benefits of pay-as-you-go (PAYG) pension systems in small open and closed economies. We apply an overlapping-generations (OLG) model in its canonical form, where we consider endogenous fertility and growth generated by human capital accumulation. From the analysis, we conclude that in a small open economy, child allowances increase the number of children, yet decrease pension benefits over the long run. If we consider a closed economy, the effect of child allowances on fertility is ambiguous and remains negative on pension benefits over the long run.

The aim of the study is to investigate the influence of the capitalist spirit in conjunction with the distribution of income on economic growth. The capitalist spirit is represented by the fact that savings rates increase with increasing relative income. We extend an endogenous AK growth model in an overlapping generational framework by implementing imperfect competition and Cournot competition. Using this model, we investigate the influence of profits on the intra- and inter-generational distributions of income and economic growth. While increasing incomes lead to a more unequal intra-generational distribution and to a redistribution of income from the old to the young generation, the impact on economic growth is in general ambiguous, although under specific assumptions it becomes positive. Furthermore, the model shows that increasing market power of firms is associated with declining labor and capital shares, declining interest rates, and an increased wealth-to-income ratio.

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