Low fertility and long run growth in an economy with a large public sector
There is plenty of evidence that growth has a negative relation to fertility and dependency ratios. Recently it has been suggested that low fertility countries may be caught in a trap that is hard to get out of. One important mechanism in such a trap would be social interaction and its effect on the ideal family size. Such social interaction mechanisms are hard to capture in formal models, therefore we use an agent based simulation model to investigate the issue. In our experimental setup a stable growth and population path is provoked into a fertility trap by rising relative child costs linked to positive growth. Even rather large increases in child benefits are then insufficient to get out of the trap. However, the small number of children temporarily enables the economy to grow faster for several decades. Removing the adaptation of social norms turns out to disarm the trap.
|Date of creation:||Oct 2008|
|Publication status:||Published as Zamac, Jovan, Daniel Hallberg and Thomas Lindh, 'Low fertility and long run growth in an economy with a large public sector' in European Journal of Population, 2010, pages 183-205.|
|Note:||ISSN: 1652-120X; ISBN: 978-91-85619-35-1|
|Contact details of provider:|| Postal: Institute for Futures Studies, Box 591, SE-101 31 Stockholm, Sweden|
Phone: 08-402 12 00
Fax: 08-24 50 14
Web page: http://www.framtidsstudier.se
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