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Dual Caregiving, Declining Birth Rate, and Economic Sustainability

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  • Quang-Thanh Tran
  • Akiomi Kitagawa

Abstract

This paper employs an overlapping generations model to analyze how placing the burden of caring for both elderly parents and children on the working generation shapes fertility and other economic outcomes. In themodel, fertility decisions create intergenerational spillovers. When one generation has fewer children, the next generation faces a heavier caregiving burden for its elderly parents, which in turn discourages childbearing. The model reveals sharply different long-run trajectories depending on the time intensity of caregiving. If care demands are moderate, sustainable growth remains feasible despite these externalities. However, when care becomes highly time-intensive, fertility declines, labor supply contracts, and the economy risks falling into a "nursing hell," where most time is devoted to caregiving. Policy measures, such as child allowances, can alleviate this dynamic by expanding the number of siblings and reducing the per-capita caregiving burden. Yet if care demands are extremely high from the outset, even such interventions cannot avert structural collapse.

Suggested Citation

  • Quang-Thanh Tran & Akiomi Kitagawa, 2025. "Dual Caregiving, Declining Birth Rate, and Economic Sustainability," TUPD Discussion Papers 77, Graduate School of Economics and Management, Tohoku University.
    • Handle: RePEc:toh:tupdaa:77
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    More about this item

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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