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Child quality choice and fertility disincentives

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Author Info
Luca Gori () (University of Pisa)
Luciano Fanti () (University of Pisa)

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Abstract

This paper analyses the effects of the introduction of child-subsidy support policies extending recent overlapping generations (OLG) models to account for endogenous fertility decisions of individuals and publicly provided pensions in a small open economy with preferences for both child quantity and child quality. It is shown that if the preference for the quality of children is higher than the preference for the quantity of children, as casual observations seem to reveal in developed countries, then child subsidies always reduce the fertility rate. This way, the article provides an explanation for possible failures of pro-natalist policies based on child subsidisation implemented in many western countries, which may therefore result as fertility disincentives instead of fertility incentives.

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File URL: http://www.accessecon.com/pubs/EB/2008/Volume10/EB-08J10002A.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 10 (2008)
Issue (Month): 7 ()
Pages: 1-6
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Handle: RePEc:ebl:ecbull:v:10:y:2008:i:7:p:1-6

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J1 - Labor and Demographic Economics - - Demographic Economics

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  1. Holger Strulik, 2004. "Economic growth and stagnation with endogenous health and fertility," Journal of Population Economics, Springer, vol. 17(3), pages 433-453, 08. [Downloadable!] (restricted)
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  2. Robert Fenge & Volker Meier, 2005. "Pensions and fertility incentives," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 28-48, February. [Downloadable!] (restricted)
    Other versions:
  3. Holger Strulik, 2004. "Child mortality, child labour and economic development," Economic Journal, Royal Economic Society, vol. 114(497), pages 547-568, 07. [Downloadable!] (restricted)
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  4. Holger Strulik, 2003. "Mortality, the Trade-off between Child Quality and Quantity, and Demo-economic Development," Metroeconomica, Blackwell Publishing, vol. 54(4), pages 499-520, November. [Downloadable!] (restricted)
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  5. van Groezen, Bas & Leers, Theo & Meijdam, Lex, 2003. "Social security and endogenous fertility: pensions and child allowances as siamese twins," Journal of Public Economics, Elsevier, vol. 87(2), pages 233-251, February. [Downloadable!] (restricted)
  6. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, vol. 86(3), pages 374-87, June. [Downloadable!] (restricted)
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  7. Berthold U. Wigger, 1999. "Pay-as-you-go financed public pensions in a model of endogenous growth and fertility," Journal of Population Economics, Springer, vol. 12(4), pages 625-640. [Downloadable!] (restricted)
  8. Martin Kolmar, 1997. "Intergenerational redistribution in a small open economy with endogenous fertility," Journal of Population Economics, Springer, vol. 10(3), pages 335-356. [Downloadable!] (restricted)
  9. Ab O, G. & Mahieu, G. & Patxot, C., 2004. "On the optimality of PAYG pension systems in an endogenous fertility setting," Journal of Pension Economics and Finance, Cambridge University Press, vol. 3(01), pages 35-62, March. [Downloadable!]
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