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.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Dipartimento di Scienze Economiche (DSE), University of Pisa, Pisa, Italy in its series Discussion Papers with number
2009/93.