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Child policy ineffectiveness in an OLG small open economy with human capital accumulation and public education

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  • Luciano Fanti
  • Luca Gori

Abstract

Motivated by the recent decrease in the number of children experienced in many developed countries, in this paper we consider an OLG small open economy with endogenous fertility and human capital formation through public education and look at the role the government can play in affecting fertility rates through the widely used child allowance policy. Contrary to the conventional wisdom, we show that child allowances do not affect fertility. The policy implication is that the public provision of child allowances is not effective as a pro-natalist policy, while also reducing human capital accumulation. In contrast, enhancing the public provision of education is beneficial for both fertility and human capital.

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Bibliographic Info

Paper provided by Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy in its series Discussion Papers with number 2009/93.

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Date of creation: 15 Oct 2009
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Handle: RePEc:pie:dsedps:2009/93

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Keywords: Child allowance; Fertility; Public education; Small open economy.;

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  1. Luciano Fanti, 2003. "Notes on Keynesian models of recession and depression," Discussion Papers 2003/19, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  2. Luciano Fanti, 2003. "Fiscal policy and tax collection lags: stability, cycles and chaos," Discussion Papers 2003/15, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
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