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Policy Analysis in Endogenous Fertility Model with Human Capital Accumulation

Author

Listed:
  • Takehiro Ito

    (Tohoku Gakuin University)

  • Kazumitsu Sako

    (Hiroshima Shudo University)

  • Yurika Shiozu

    (Kyoto Sangyo University)

  • Masatoshi Jinno

    (Nanzan University)

  • Masaya Yasuoka

    (Kwansei Gakuin University)

Abstract

This paper sets up an endogenous fertility model with human capital accumulation and uses simulation analysis to evaluate how four child-care support policies ((i) child allowances, (ii) policies to subsidize childcare services, (iii) childcare leave benefits, and (iv) education subsidy policies) affect the fertility rate and the amount of human capital accumulation. This paper presents consideration of the fertility function of a constant elasticity of substitution (CES) function for child-care time and child-care services. The analysis results show that policies (i)-(iii) increase fertility in the short term, but in the long term, households' disposable income declines because of lower human capital accumulation, leading to a lower fertility rate. A policy of subsidy for education investment can raise fertility in the long run by virtue of an increase in human capital accumulation.

Suggested Citation

  • Takehiro Ito & Kazumitsu Sako & Yurika Shiozu & Masatoshi Jinno & Masaya Yasuoka, 2024. "Policy Analysis in Endogenous Fertility Model with Human Capital Accumulation," Discussion Paper Series 268, School of Economics, Kwansei Gakuin University.
    • Handle: RePEc:kgu:wpaper:268
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    References listed on IDEAS

    as
    1. Akira Yakita, 2017. "Fertility, Child Care Outside the Home and Pay-as-You-Go Social Security," Population Economics, in: Population Aging, Fertility and Social Security, chapter 0, pages 45-63, Springer.
    2. Patricia Apps & Ray Rees, 2004. "Fertility, Taxation and Family Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(4), pages 745-763, December.
    3. David de la Croix & Matthias Doepke, 2003. "Inequality and Growth: Why Differential Fertility Matters," American Economic Review, American Economic Association, vol. 93(4), pages 1091-1113, September.
    4. Dolores Ferrero Martínez & Amaia Iza, 2004. "Skill premium effects on fertility and female labor force supply," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(1), pages 1-16, February.
    5. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, vol. 86(3), pages 374-387, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Child Allowance; Child-Care Service; Child-Care Time; Education Investment; Endogenous Fertility;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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