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Does Pro-population Policy Raise Per Capita Consumption?

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Author Info
Ken-ichi Hashimoto
Yoshiyasu Ono

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Abstract

We theoretically analyze the effects of a child allowance, an improvement in the efficiency of child rearing and a labor income tax on the fertility rate and per capita consumption. The effects on per capita consumption are opposite in the absence, and the presence, of unemployment. For example, a child allowance urges people to have more children and allocate more labor to child rearing, decreasing labor supply for the purpose of commodity production. Therefore, under full employment, it decreases per capita consumption. In the presence of unemployment, however, it reduces the deflationary gap and hence stimulates per capita consumption.

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Paper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0697.

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Date of creation: Jul 2007
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Handle: RePEc:dpr:wpaper:0697

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