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National welfare implications of regional childcare policy: A theoretical approach

Author

Listed:
  • Hiroyuki Hashimoto

    (University of Hyogo, Japan)

  • Tohru Naito

    (Doshisha University, Japan)

Abstract

This study examines the effects of regional childcare policy on regional and total fertility, interregional migration, capital accumulation, and welfare. The study utilizes an overlapping generations model with endogenous fertility and two asymmetric regions; one region has children who do not have access to childcare facilities, whereas the other region does not. In this setting, Hashimoto and Naito (2023) showed that a regional childcare policy can increase both regional and total fertility. However, they did not refer to welfare effects. As the government's ultimate objective is to maximize or improve social welfare, it need not necessarily focus on overcoming declining fertility rates. Therefore, this study explores whether the childcare support policy of Hashimoto and Naito (2023) has improved the social welfare of the economy. Under a plausible rate of labor income share, the childcare support policy raises consumption owing to a decrease in capital accumulation. Thus, childcare support policy increases social welfare when the fertility rate rises or is unaffected, and it does not necessarily increase social welfare if it causes a decline in the fertility rate.

Suggested Citation

  • Hiroyuki Hashimoto & Tohru Naito, 2024. "National welfare implications of regional childcare policy: A theoretical approach," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 18(1), pages 38-66, June.
    • Handle: RePEc:rrs:journl:v:18:y:2024:i:1:p:38-66
    as

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    References listed on IDEAS

    as
    1. Koka, Katerina & Rapallini, Chiara, 2023. "Italy’s demographic trap: Voting for childcare subsidies and fertility outcomes," European Journal of Political Economy, Elsevier, vol. 76(C).
    2. Hiroshi Goto & Keiya Minamimura, 2019. "Geography and Demography: New Economic Geography with Endogenous Fertility," The Japanese Economic Review, Springer, vol. 70(4), pages 537-568, December.
    3. Vicente Díaz Gandasegui & Begoña Elizalde-San Miguel & Maria T. Sanz, 2021. "Back to the Future: a Sensitivity Analysis to Predict Future Fertility Rates Considering the Influence of Family Policies—The Cases of Spain and Norway," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(3), pages 943-968, April.
    4. Hiroshi Goto & Keiya Minamimura, 2019. "Geography and Demography: New Economic Geography With Endogenous Fertility," The Japanese Economic Review, Japanese Economic Association, vol. 70(4), pages 537-568, December.
    5. Tohru Naito & Tatsuya Omori, 2017. "Aging And Urban Agglomeration Under A Multi-Regional Overlapping Generations Model," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 29(2), pages 135-150, July.
    6. Mizuki Kawabata, 2014. "CHILDCARE ACCESS AND EMPLOYMENT: THE CASE OF WOMEN WITH PRESCHOOL-AGED CHILDREN IN TOKYO[“Re-use of]," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 26(1), pages 40-56, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    childcare policy; welfare; fertility; overlapping generations model; capital accumulation;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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