Child Benefit and Fiscal Burden with Endogenous Fertility

Oguro, Kazumasa and Takahata, Junichiro (2009): Child Benefit and Fiscal Burden with Endogenous Fertility.

Abstract

This paper studies a possibility of efficiency improvement by child benefit programs in an overlapping generations economy with endogenous fertility and government debt. We derive conditions for improving an efficiency by child benefit using Representative-Consumer efficiency (RC-efficiency), an efficiency criterion for an endogenous fertility setting developed by Michel and Wigniolle (2007). It is shown that the result crucially depends on the relative amount of accumulated government debt in the economy. It is likely to hold in an economy of developed countries with a low fertility rate. We provide an implication of the results in the real economy.

• Item Type: MPRA Paper
• Language: English
• Keywords: Endogenous fertility; Pareto-efficiency; child benefit; fiscal burden
• Subjects: D - Microeconomics > D6 - Welfare Economics; J - Labor and Demographic Economics > J1 - Demographic Economics; H - Public Economics > H6 - National Budget, Deficit, and Debt

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