Old-Age Support and Demographic Transition in Developing Countries. A cultural Transmission Model

We model intergenerational old-age support within the context of a developing
country that faces demographic transition: declining fertility and increasing life expectancy.
We attempt to answer if agents will be able to support their parents during the next
generations and under what conditions. For this purpose we use a three period overlapping
generations model and a cultural transmission process, in which agents may be socialized to
different cultural family models (old-age supporters and non-supporters). As life expectancy
increases, we find conditions under which a reduced fertility rate is compatible with the
expectation to be supported during old-age. This offers an additional explanation for the
persistency of family old-age support in developing countries facing demographic
transsition.