IDEAS home Printed from https://ideas.repec.org/a/spr/jopoec/v37y2024i2d10.1007_s00148-024-01024-9.html
   My bibliography  Save this article

Old-age support policy and fertility with strategic bequest motives

Author

Listed:
  • Akira Yakita

    (Nagoya City University)

Abstract

This paper presents an analysis of the effects of public old-age support on individuals’ fertility decisions and on the long-term equilibrium in an overlapping generation economy with strategic bequest motives. Parents must pay their adult children at least the reservation wage to receive informal old-age support from them (individual rationality constraint). Formal old-age support is financed through wage taxes on children. The increased present value of formal old-age support tends to increase old-age utility, thereby decreasing the family support demand and decreasing savings for the old age. The increased wage tax reduces the opportunity cost of child-rearing time, thereby increasing the fertility rate. The effects of increased formal old-age support on per-worker capital and labor are indeterminate, as is the effect on the long-term lifetime utility of individuals. A strategic bequest motive might engender a higher fertility rate than that of the social optimum.

Suggested Citation

  • Akira Yakita, 2024. "Old-age support policy and fertility with strategic bequest motives," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(2), pages 1-23, June.
    • Handle: RePEc:spr:jopoec:v:37:y:2024:i:2:d:10.1007_s00148-024-01024-9
    DOI: 10.1007/s00148-024-01024-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00148-024-01024-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00148-024-01024-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Justina Klimaviciute & Pierre Pestieau, 2023. "The economics of long‐term care. An overview," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1192-1213, September.
    2. Miyazawa, Kazutoshi, 2010. "Old age support in kind," Journal of Pension Economics and Finance, Cambridge University Press, vol. 9(3), pages 445-472, July.
    3. Charles Yuji Horioka & Emin Gahramanov & Aziz Hayat & Xueli Tang, 2018. "Why Do Children Take Care Of Their Elderly Parents? Are The Japanese Any Different?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(1), pages 113-136, February.
    4. Patricia Apps & Ray Rees, 2004. "Fertility, Taxation and Family Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(4), pages 745-763, December.
    5. Cremer, Helmuth & Roeder, Kerstin, 2013. "Long-term care policy, myopia and redistribution," Journal of Public Economics, Elsevier, vol. 108(C), pages 33-43.
    6. Pierre Pestieau & Motohiro Sato, 2008. "Long‐Term Care: the State, the Market and the Family," Economica, London School of Economics and Political Science, vol. 75(299), pages 435-454, August.
    7. Jooyeoun Suh, 2016. "Measuring the “Sandwich”: Care for Children and Adults in the American Time Use Survey 2003–2012," Journal of Family and Economic Issues, Springer, vol. 37(2), pages 197-211, June.
    8. Toshiki Tamai, 2023. "Social security, economic growth, and social welfare in an overlapping generation model with idiosyncratic TFP shock and heterogeneous workers," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1829-1862, July.
    9. Meghan M. Skira, 2015. "Dynamic Wage And Employment Effects Of Elder Parent Care," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(1), pages 63-93, February.
    10. Pestieau, Pierre & Ponthiere, Gregory, 2016. "Long-term care and births timing," Journal of Health Economics, Elsevier, vol. 50(C), pages 340-357.
    11. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 151-182, July.
    12. David de la Croix & Matthias Doepke, 2003. "Inequality and Growth: Why Differential Fertility Matters," American Economic Review, American Economic Association, vol. 93(4), pages 1091-1113, September.
    13. Nishimura, Kazuo & Zhang, Junsen, 1992. "Pay-as-you-go public pensions with endogenous fertility," Journal of Public Economics, Elsevier, vol. 48(2), pages 239-258, July.
    14. Cremer, Helmuth & Canta, Chiara, 2022. "Family bargaining and the gender gap in informal care," TSE Working Papers 2022-1352, Toulouse School of Economics (TSE).
    15. Coe, Norma B. & Goda, Gopi Shah & Van Houtven, Courtney Harold, 2023. "Family spillovers and long-term care insurance," Journal of Health Economics, Elsevier, vol. 90(C).
    16. Yoko Niimi, 2018. "Does providing informal elderly care hasten retirement? Evidence from Japan," Review of Development Economics, Wiley Blackwell, vol. 22(3), pages 1039-1062, August.
    17. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(1), pages 1-25.
    18. Horioka, Charles Yuji & Gahramanov, Emin & Hayat, Aziz & Tang, Xueli, 2021. "The impact of bequest motives on labor supply and retirement behavior in Japan: A theoretical and empirical analysis," Journal of the Japanese and International Economies, Elsevier, vol. 62(C).
    19. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, vol. 86(3), pages 374-387, June.
    20. Akira Yakita, 2001. "Uncertain lifetime, fertility and social security," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(4), pages 635-640.
    21. Sugawara, Shinya & Nakamura, Jiro, 2014. "Can formal elderly care stimulate female labor supply? The Japanese experience," Journal of the Japanese and International Economies, Elsevier, vol. 34(C), pages 98-115.
    22. Cremer, Helmuth & Gahvari, Firouz & Pestieau, Pierre, 2017. "Uncertain altruism and the provision of long term care," Journal of Public Economics, Elsevier, vol. 151(C), pages 12-24.
    23. Justina Klimaviciute & Sergio Perelman & Pierre Pestieau & Jerome Schoenmaeckers, 2017. "Caring for dependent parents: Altruism, exchange or family norm?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 835-873, July.
    24. Fu, Rong & Noguchi, Haruko & Kawamura, Akira & Takahashi, Hideto & Tamiya, Nanako, 2017. "Spillover effect of Japanese long-term care insurance as an employment promotion policy for family caregivers," Journal of Health Economics, Elsevier, vol. 56(C), pages 103-112.
    25. Rob Alessie & Viola Angelini & Giacomo Pasini, 2014. "Is It True Love? Altruism Versus Exchange in Time and Money Transfers," De Economist, Springer, vol. 162(2), pages 193-213, June.
    26. Liu, Hong & Ma, Jinqiu & Zhao, Liqiu, 2023. "Public long-term care insurance and consumption of elderly households: Evidence from China," Journal of Health Economics, Elsevier, vol. 90(C).
    27. Takashi Oshio & Emiko Usui, 2017. "Informal parental care and female labour supply in Japan," Applied Economics Letters, Taylor & Francis Journals, vol. 24(9), pages 635-638, May.
    28. Meghan M. Skira, 2015. "Dynamic Wage And Employment Effects Of Elder Parent Care," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56, pages 63-93, February.
    29. Akira Yakita, 2018. "Female labor supply, fertility rebounds, and economic development," Review of Development Economics, Wiley Blackwell, vol. 22(4), pages 1667-1681, November.
    30. Ph. De Donder & P. Pestieau, 2017. "Private, Social, and Self-Insurance for Long-Term Care in the Presence of Family Help," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(1), pages 18-37, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yakita, Akira, 2020. "Economic development and long-term care provision by families, markets and the state," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).
    2. Justina Klimaviciute & Pierre Pestieau, 2023. "The economics of long‐term care. An overview," Journal of Economic Surveys, Wiley Blackwell, vol. 37(4), pages 1192-1213, September.
    3. Yakita, Akira, 2019. "Optimal long-term care policy in an intergenerational exchange setting," Research in Economics, Elsevier, vol. 73(4), pages 321-328.
    4. repec:bla:annpce:v:89:y:2018:i:1:p:49-63 is not listed on IDEAS
    5. Yakita, Akira, 2023. "Elderly long-term care policy and sandwich caregivers’ time allocation between child-rearing and market labor," Japan and the World Economy, Elsevier, vol. 65(C).
    6. Costa-Font, Joan & Jiménez-Martín, Sergi & Vilaplana-Prieto, Cristina, 2022. "Do Public Caregiving Subsidies and Supports affect the Provision of Care and Transfers?," Journal of Health Economics, Elsevier, vol. 84(C).
    7. Pestieau, Pierre & Ponthiere, Gregory, 2016. "The public economics of long term care," CEPR Discussion Papers 11365, C.E.P.R. Discussion Papers.
    8. Luciano Fanti & Luca Gori, 2014. "Endogenous fertility, endogenous lifetime and economic growth: the role of child policies," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 529-564, April.
    9. Richard C. Barnett & Joydeep Bhattacharya & Mikko Puhakka, 2018. "Private versus public old-age security," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(3), pages 703-746, July.
    10. Ishida, Ryo & Oguro, Kazumasa & Yasuoka, Masaya, 2018. "Population density, fertility, and childcare services from the perspective of a two-region overlapping generations model," Economic Analysis and Policy, Elsevier, vol. 59(C), pages 29-39.
    11. Justina Klimaviciute & Pierre Pestieau & Jérôme Schoenmaeckers, 2019. "Family altruism and long-term care insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(2), pages 216-230, April.
    12. Creina Day, 2012. "Will Fertility Rebound In Japan," Asia Pacific Economic Papers 395, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    13. Masatoshi Jinno & Masaya Yasuoka, 2016. "Are the social security benefits of pensions or child-care policies best financed by a consumption tax?," Business and Economic Horizons (BEH), Prague Development Center, vol. 12(3), pages 94-112, September.
    14. Creina Day, 2012. "Economic Growth, Gender Wage Gap and Fertility Rebound," The Economic Record, The Economic Society of Australia, vol. 88(s1), pages 88-99, June.
    15. Masaya Yasuoka & Naohisa Goto, 2015. "How is the child allowance to be financed? By income tax or consumption tax?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(3), pages 249-269, September.
    16. Baudin, Thomas, 2010. "A Role For Cultural Transmission In Fertility Transitions," Macroeconomic Dynamics, Cambridge University Press, vol. 14(4), pages 454-481, September.
    17. d'Albis, Hippolyte & Greulich, Angela & Ponthiere, Gregory, 2018. "Development, fertility and childbearing age: A Unified Growth Theory," Journal of Economic Theory, Elsevier, vol. 177(C), pages 461-494.
    18. Stelter, Robert, 2014. "Over-aging: Are present human populations too old?," Thuenen-Series of Applied Economic Theory 137, University of Rostock, Institute of Economics.
    19. Thomas Baudin, 2011. "Family Policies: What Does the Standard Endogenous Fertility Model Tell Us?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 13(4), pages 555-593, August.
    20. Geyer, Johannes & Korfhage, Thorben, 2015. "Long-term care reform and the labor supply of household members: Evidence from a quasi-experiment," Ruhr Economic Papers 574, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    21. Matthias Doepke, 2004. "Accounting for Fertility Decline During the Transition to Growth," Journal of Economic Growth, Springer, vol. 9(3), pages 347-383, September.

    More about this item

    Keywords

    Fertility; Individual rationality constraint; Old-age support; Strategic bequest motives;
    All these keywords.

    JEL classification:

    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jopoec:v:37:y:2024:i:2:d:10.1007_s00148-024-01024-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.