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Can Child-Care Support Policies Halt Decreasing Fertility?

  • Masaya Yasuoka

    (Faculty of Economics and Business Administration, The University of Kitakyushu, Japan)

Some earlier papers examine whether child allowances can raise fertility or not in an endogenous fertility model with a defined contribution pension system. They derive that a child allowance can raise fertility. This paper is aimed at deriving the level of child allowances or education subsidies to make the pension system sustainable. A child allowance can raise fertility instantaneously. However, in the long run, fertility might continue decreasing and the pension system might not be sustainable if less child allowance is provided. In a defined benefit system, tax burdens for pension benefits are heavy in an aging society with fewer children. A heavy tax burden reduces the household income and then decreases fertility. Therefore, child allowances must be provided to halt decreasing fertility in the long run. Nevertheless, given parametric conditions, education subsidy of more than a certain level can not halt the decrease of fertility in the long run.

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Article provided by Econjournals in its journal International Journal of Economics and Financial Issues.

Volume (Year): 3 (2013)
Issue (Month): 2 ()
Pages: 409-419

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Handle: RePEc:eco:journ1:2013-02-13
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  1. DE LA CROIX, David & DOEPKE, Matthias, 2001. "Inequality and Growth : Why Differential Fertility Matters," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Bas van Groezen & L. Meijdam, 2004. "Growing Old and Staying Young: Population Policy in an Ageing Closed Economy," Working Papers 04-28, Utrecht School of Economics.
  3. repec:cor:louvrp:-1676 is not listed on IDEAS
  4. 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.
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