Does Child Support Increase the Number of Children? An Involuntary Employment-Specific Approach
AbstractRecently, as low birth rates and the aging of society have intensified, considerable analysis is being conducted using overlapping generations models with endogenous birth rates. However, most previous studies have assumed full employment. Since it is the case that unemployment does exist in reality, this paper employs a labor-union wage-negotiation model that models unemployment to analyze the effects of child-support tax on employment and number of children. First, an increase in child-support tax increases the unemployment rate and decreases capital stock. A new finding is that an increase in unemployment decreases the number of children through decreasing disposable income. Also, when certain conditions are satisfied the number of children per capita in the economy as a whole also decreases with introduction of child-support tax. This paper concludes that excessive child-support tax can have opposite the intended effect. Another new finding is that an increase in the unemployment insurance benefits rate decreases the number of children by decreasing disposable income through increasing unemployment.
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Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 11-22.
Length: 22 pages
Date of creation: Jun 2011
Date of revision:
Child-support; The number of children; Unemployment; Union; Overlapping generations model;
Find related papers by JEL classification:
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-25 (All new papers)
- NEP-DGE-2011-06-25 (Dynamic General Equilibrium)
- NEP-LAB-2011-06-25 (Labour Economics)
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