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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.

Suggested Citation

  • Luciano Fanti & Luca Gori, 2009. "Child policy ineffectiveness in an OLG small open economy with human capital accumulation and public education," Discussion Papers 2009/93, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    • Handle: RePEc:pie:dsedps:2009/93
    Note: ISSN 2039-1854
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    File URL: https://www.ec.unipi.it/documents/Ricerca/papers/2009-93.pdf
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    References listed on IDEAS

    as
    1. Luciano Fanti & Piero Manfredi, 2003. "Neo-classical labour market dynamics, chaos and the Phillips curve," Discussion Papers 2003/21, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    2. 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.
    3. Luciano Fanti, 2003. "Technological diffusion and cyclical growth," Discussion Papers 2003/20, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    4. 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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    Cited by:

    1. Lorenzo Corsini & Pier Mario Pacini & Luca Spataro, 2010. "Workers' Choice on Pension Schemes: an Assessment of the Italian TFR Reform Through Theory and Simulations," Discussion Papers 2010/96, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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    More about this item

    Keywords

    Child allowance; Fertility; Public education; Small open economy.;
    All these keywords.

    JEL classification:

    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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