Kazumasa, Oguro and Junichiro, Takahata and Manabu, Shimasawa (2009): Child Benefit and Fiscal Burden: OLG Model with Endogenous Fertility.
Download (507kB) | Preview
In this paper, we present an OLG simulation model with endogenous fertility in order to analyze the relationship between child benefit and fiscal burden in Japan. Our simulation results show that expansion of the child benefit will improve the welfare of current and future generations. On the other hand, our findings show that we cannot expect a significant long-term improvement in welfare solely from implementing a policy of increasing the consumption tax. If both the sustainability of the fiscal budget and the improvement of the welfare of current and future generations are requirements, we will need to promote a strategy consisting of such components as a policy-mix that includes both child benefit expansion and additional fiscal reform, i.e. increasing the consumption tax. Implementation of such a policy-mix could be expected to yield a higher economic level in the welfare of current and future generations than could be expected solely from consumption tax reform.
|Item Type:||MPRA Paper|
|Original Title:||Child Benefit and Fiscal Burden: OLG Model with Endogenous Fertility|
|Keywords:||Computable general equilibrium (CGE) model; overlapping generations (OLG); child benefit; endogenous fertility|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy
J - Labor and Demographic Economics > J1 - Demographic Economics > J13 - Fertility; Family Planning; Child Care; Children; Youth
H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions
E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E17 - Forecasting and Simulation: Models and Applications
D - Microeconomics > D6 - Welfare Economics > D61 - Allocative Efficiency; Cost-Benefit Analysis
J - Labor and Demographic Economics > J1 - Demographic Economics > J11 - Demographic Trends, Macroeconomic Effects, and Forecasts
|Depositing User:||Kazumasa Oguro|
|Date Deposited:||10. Jul 2009 00:35|
|Last Modified:||13. Feb 2013 09:22|
Abel, A. B., Mankiw, N. G., Summers, L. H., and Zeckhauser, R. J. (1989), “Assessing Dynamic Efficiency: Theory and Evidence,” Review of Economics Studies 56(1), pp. 1–20.
Becker, G. S. (1960), “An economic analysis of fertility. In: Demographic and economic change in developed countries,” National Bureau of Economic Research Conference Series 11, pp. 209–231.
Becker, G. S. and Barro, R. J. (1988), “A reformulation of the economic theory of fertility,” Quarterly Journal Of Economics 103, pp. 1–25.
Chakrabarti, R. (1999), “Endogenous fertility and growth in a model with old age support,” Economic Theory 13, pp. 393–416.
Conde-Ruiz, J. I. and Gimenez, E. L. (2002), “Perez-Nievas, M.: Efficiency in an overlapping generations model with endogenous population,” mimeo.
Diamond, P.A. (1965), “National Debt in a Neoclassical Growth Model,” American Economic Review 55(5), pp. 1126–1150.
Eckstein, Z. and Wolpin, K. (1985), “Endogenous fertility and optimal population size,” Journal of Public Economics 27, pp. 93–106.
Golosov, M., Jones, L. E. and Tertilt, M. (2004), “Efficiency with endogenous population growth,” National Bureau of Economic Research 10231.
Ihori, T., Kato, R., Kawade, M. and Bessho, S. (2006). “Public debt and economic growth in an aging Japan,” K. Kaizuka and Ann O. Krueger, eds., Tackling Japan's Fiscal Challenges: Strategies to Cope with High Public Debt and Population Aging. [in Japanese]
Michel, P. and Wigniolle, B. (2007), “On Efficient Child Making,” Economic Theory 31(2), pp. 307–326.
National Institute of Population and Social Security Research. Population Statistics of Japan, 2007. [in Japanese]
________. Population Projections for Japan: 2006-2055, 2006.
Nishimura, K. and Zhang, J. (1992), “Pay-as-you-go public pensions with endogenous fertility,” Journal of Public Economics 48, pp. 239–258.
OECD. Tax Database, Paris, 2007.
Oguro, K. and Takahata, J. (2009), “Child Benefit and Fiscal Burden with Endogenous Fertility,” Public Economics Program, School of International and Public Policy, Hitotsubashi University, Discussion Papers on Demography and Policy #2009-001.
Raut, L. K. and Srinivasan, T. N. (1994), “Dynamics of endogenous growth,” Economic Theory 4, pp. 777–790.
Sadahiro, A., and M. Shimasawa (2001). “Fiscal Sustainability and the Primary Surplus: A Simulation Analysis with OLG Model,” JCER Economic Journal 43. pp. 117–132. [in Japanese]
________ and ________ (2003). “The computable overlapping generations model with an endogenous growth mechanism,” Economic Modeling 20(1), pp. 1–24.
Uemura, T. (2002). “Lifecycle General Equilibrium Analysis on Social Security,” Keizaironshu 28(1). [in Japanese]
van Groezen, B., Leers, T., and Meijdam, L. (2003) “Social Security and Endogenous Fertility: Pensions and Child Allowances as Siamese Twins,” Journal of Public Economics 87, pp. 233–251.
Whitehouse, Edward. Pensions Panorama: Retirement-Income Systems in 53 Countries, The World Bank, 2007.
Willis, R. (1973), “A new approach to the economic theory of fertility behavior,” Journal of Political Economy 81, S14–S64.