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Cross‐country differences in the long‐run economic impacts of increased fertility

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  • Thomas Davoine

Abstract

Higher fertility slowly increases the ratios of workers to retirees, easing the challenge of financing pensions due to population aging. However, simulation studies differ on output impacts. Whether differences are because of models or country characteristics is unknown. Using the same model for 14 European countries, I find that pension deficits are reduced everywhere and welfare improves if fertility increases, but output per capita increases everywhere except in Sweden. Differences in population structures, age–productivity profiles, and pension systems explain the exception. Inter vivos transfers and labor markets, and their role in production, influence the size of welfare gains. Fertility‐promoting policies can ease public finance challenges but may worsen output per capita if pension payments are loosely connected to earnings or if age–productivity profiles are steep.

Suggested Citation

  • Thomas Davoine, 2026. "Cross‐country differences in the long‐run economic impacts of increased fertility," Scandinavian Journal of Economics, Wiley Blackwell, vol. 128(1), pages 104-151, January.
    • Handle: RePEc:bla:scandj:v:128:y:2026:i:1:p:104-151
    DOI: 10.1111/sjoe.12597
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    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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