Intergenerational transfers in an endogenous growth model with fertility changes

In endogenous growth model, one cannot make a case for unfunded social security on pure efficiency grounds. It reduces the growth rate so that future generations are harmed. Whereas this finding is valid for constant population growth, one might ask whether it still holds when there are demographic shocks. We show that in that case, ascending transfers such as implied by unfunded social security can be welfare-improving