A Study on Financial Deficit and Declining Birthrate — From the Viewpoint of “Children as a Social Security Revenue Source” —-
AbstractWhile social security systems in the developed countries including Japan are taking pay-as-you-go system based on the cooperation between generations, the fertility number as a tax base of social security is decreasing and the low fertility tendency is common in the developed countries. And if each generation behaves with considering life-cycle and chooses the fertility level rationally, it is considered that there is a possibility that the existence of coverage for social security by fiscal deficit may affect the fertility to some extent. Hence, in this paper, if regarding children as a tax base of social security, we consider the following analysis; 1) from a macro viewpoint, by constructing a dynamic overlapping generation model, how the coverage for social security by fiscal deficit affects on fertility, 2) from a micro viewpoint, in case that there is no relationship between social security transfer and fertility of each household, how the fertility number in the whole economy affects. As a result, to 1), we get an implication that there is a possibility fiscal deficit may affect negatively on fertility from the time series analysis with using 17 countries panel data. Moreover, to 2), from a micro viewpoint, by simplified Nash equilibrium game, in case that there is no relationship between social security benefit and fertility number, there is a negative impact as compared to a social optimal fertility level. In this paper, it is shown that, if children are regarded as a tax base, in order to avoid the negative relationship, it is necessary to consider the following policies; 1) the coverage for social security by fiscal deficit should be set to zero, 2) and a system such that the payment schedule is depending on the number of household children should be introduced, considering the balance of benefit and burden.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 16120.
Date of creation: Jul 2008
Date of revision:
Finacial deficit: endogenous fertility: child investment: social security system;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H4 - Public Economics - - Publicly Provided Goods
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J1 - Labor and Demographic Economics - - Demographic Economics
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gary S. Becker, 1974. "A Theory of Marriage," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 299-351 National Bureau of Economic Research, Inc.
- Rosenzweig, Mark R. & Schultz, T. Paul, 1987.
"Fertility and Investments in Human Capital: Estimates of the Consequences of Imperfect Fertility Control in Malaysia,"
7513, University of Minnesota, Economic Development Center.
- Rosenzweig, Mark R. & Paul Schultz, T., 1987. "Fertility and investments in human capital : Estimates of the consequence of imperfect fertility control in Malaysia," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 163-184.
- van Groezen, Bas & Leers, Theo & Meijdam, Lex, 2003. "Social security and endogenous fertility: pensions and child allowances as siamese twins," Journal of Public Economics, Elsevier, vol. 87(2), pages 233-251, February.
- Schultz, Theodore W, 1973. "The Value of Children: An Economic Perspective," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S2-13, Part II, .
- Barro, Robert J & Becker, Gary S, 1989.
"Fertility Choice in a Model of Economic Growth,"
Econometric Society, vol. 57(2), pages 481-501, March.
- Robert J. Barro & Gary S. Becker, . "Fertility Choice in a Model of Economic Growth," University of Chicago - Population Research Center 88-8, Chicago - Population Research Center.
- Barro, R.J. & Becker, G.S., 1988. "Fertility Choice In A Model Of Economic Growth," University of Chicago - Economics Research Center 88-8, Chicago - Economics Research Center.
- Willis, Robert J, 1973. "A New Approach to the Economic Theory of Fertility Behavior," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S14-64, Part II, .
- Yoshio Higuchi & Jane Waldfogel & Masahiro Abe, 1999. "Family leave policies and women's retention after childbirth: Evidence from the United States, Britain, and Japan," Journal of Population Economics, Springer, vol. 12(4), pages 523-545.
- Becker, Gary S, 1973. "A Theory of Marriage: Part I," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 813-46, July-Aug..
- Gary S. Becker, 1974.
"A Theory of Marriage: Part II,"
in: Marriage, Family, Human Capital, and Fertility, pages 11-26
National Bureau of Economic Research, Inc.
- Nakamura, Jiro & Ueda, Atsuko, 1999. "On the Determinants of Career Interruption by Childbirth among Married Women in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 13(1), pages 73-89, March.
- Cristino R. Arroyo & Junsen Zhang, 1997. "Dynamic microeconomic models of fertility choice: A survey," Journal of Population Economics, Springer, vol. 10(1), pages 23-65.
- George B. Roberts, Chairman, Universities-National Bureau Committee for Economic Research, 1960. "Demographic and Economic Change in Developed Countries," NBER Books, National Bureau of Economic Research, Inc, number univ60-2, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.