Public pensions, family allowances and endogenous demographic change

"A tax-transfer system deals with redistribution a PAYGmong generations and corrective taxation a PAYGt the same time. Since such a policy is a government's task, we take a normative approach and pose the question: Which tax-transfer system should a government apply to maximize social welfare? The framework we consider allows for endogenous demographic aspects...: first, fertility has a great impact on a PAYG [pay-as-you-go] financed pension insurance; and second, through education human capital is accumulated.... We analyzed the optimal extent of a public pension scheme in the presence of external effects of fertility and education on the net domestic product." Pension schemes in Germany and the United States are compared.