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What entices the Stork? Fertility, Education and Family Payments

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  • Creina Day
  • Steve Dowrick

Abstract

Developed economies, experiencing concomitant declining fertility and rising educational attainment, have introduced policies to boost fertility. We model substitution of bought in services for parental time in the rearing and education of children in an economy where technological progress leads households to choose fewer, but better educated, children. We analyse the effects on fertility and education of a baby bonus, paid maternity leave and child care subsidies. We establish conditions under which either maternity or child care benefits are more efficacious in raising fertility, and we establish that a lump sum baby bonus will increase fertility only if the bonus increases faster than income per capita. Policies that stimulate fertility also raise parental investment in education.

Suggested Citation

  • Creina Day & Steve Dowrick, 2010. "What entices the Stork? Fertility, Education and Family Payments," ANU Working Papers in Economics and Econometrics 2010-516, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2010-516
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp516.pdf
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    References listed on IDEAS

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    1. Creina Day & Steve Dowrick, 2004. "Ageing Economics: Human Capital, Productivity and Fertility," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 11(1), pages 3-20.
    2. Alessandro Balestrino & Alessandro Cigno & Anna Pettini, 2002. "Endogenous Fertility and the Design of Family Taxation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(2), pages 175-193, March.
    3. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    4. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 323-350, National Bureau of Economic Research, Inc.
    5. Patricia Apps & Ray Rees, 2004. "Fertility, Taxation and Family Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(4), pages 745-763, December.
    6. Ross Guest & Nick Parr, 2010. "The Effects of Family Benefits on Childbearing Decisions: A Household Optimising Approach Applied to Australia," The Economic Record, The Economic Society of Australia, vol. 86(275), pages 609-619, December.
    7. James Feyrer & Bruce Sacerdote & Ariel Dora Stern, 2008. "Will the Stork Return to Europe and Japan? Understanding Fertility within Developed Nations," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 3-22, Summer.
    8. Peter Mcdonald, 2006. "Low Fertility and the State: The Efficacy of Policy," Population and Development Review, The Population Council, Inc., vol. 32(3), pages 485-510, September.
    9. Gary S. Becker & H. Gregg Lewis, 1974. "Interaction between Quantity and Quality of Children," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 81-90, National Bureau of Economic Research, Inc.
    10. Day Creina, 2004. "The Dynamics of Fertility and Growth: Baby Boom, Bust and Bounce-Back," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-34, November.
    11. Cigno, Alessandro & Rosati, Furio C., 1996. "Jointly determined saving and fertility behaviour: Theory, and estimates for Germany, Italy, UK and USA," European Economic Review, Elsevier, vol. 40(8), pages 1561-1589, November.
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    Cited by:

    1. Louise Rawlings & Stephen J. Robson & Pauline Ding, 2016. "Socioeconomic Response by Age Group to the Australian Baby Bonus: A Multivariate Analysis of Birth Data from 2001-13," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 19(2), pages 111-129.
    2. Nick Parr, 2011. "The contribution of increases in family benefits to Australia’s early 21st-century fertility increase: An empirical analysis," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 25(6), pages 215-244.
    3. Koka, Katerina & Rapallini, Chiara, 2023. "Italy’s demographic trap: Voting for childcare subsidies and fertility outcomes," European Journal of Political Economy, Elsevier, vol. 76(C).

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    More about this item

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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