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On the relationship between fertility and public national debt

  • Fanti, Luciano
  • Spataro, Luca

Public debt and fertility are two issues of major concern in the current economic policy debate, especially in countries with below-replacement-fertility and large debt (which appears further enlarged as a consequence of the recent world financial distress 2008–2009). In this paper we show that, at the steady state, public debt is in general harmful for fertility, in that debt issuing almost ever crowds fertility. The relationship is however reversed if debt is sufficiently low and the share of capital (labor) in the economy is sufficiently low (high). Hence, our analysis would recommend that developed, capital intensive economies (such as OECD countries) aiming at a fertility recovery should reduce national debt, while developing, labor intensive economies, aiming at reducing fertility, should increase (reduce) national debt only if they are debt virtuous (vicious).

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 33 (2013)
Issue (Month): C ()
Pages: 843-849

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Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:843-849
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