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Public Provision of Private Child Goods

  • Masako Kimura

    ()

    (Institute of Economic Research, Kyoto University)

  • Daishin Yasui

    ()

    (Graduate School of Economics, Kyoto University)

This paper analyzes the public provision of private goods for children in a politicoeconomic model with endogenous fertility. The government provides every child with goods that can also be purchased by parents in private markets, and the level of provision is determined by majority rule. Households with many children benefit from the public provision more than those with fewer children; thus, a political conflict arises between them. The distribution of the number of children across households, which is a crucial factor for determining which group is politically dominant, is endogenously determined by households' fertility decision. The sequential interaction between fertility and political decisions might lead to multiple equilibria: equilibrium with high-fertility and low-private/public-spending-ratio and equilibrium with lowfertility and high-private/public-spending-ratio. Our model could explain the large differences in fertility and structure of child-related spending across countries.

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File URL: http://www.kier.kyoto-u.ac.jp/DP/DP662.pdf
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Paper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 662.

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Length: 33pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:kyo:wpaper:662
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