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Public debt, child allowances, and pension benefits with endogenous fertility

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  • Yasuoka, Masaya
  • Miyake, Atsushi

Abstract

The stock of public debt in some developed countries continues to increase because of a lack of tax revenues and the burdens of social security. Many of those developed countries suffer from lower birth rates. Child allowances might help to raise fertility, leading to higher tax revenue in the future because of an increase in the younger population. In this paper, the authors examine whether or not child allowances reduce the public debt stock as a share of Gross Domestic Product (GDP) in an economy with a pension system. As long as the long-run debt ratio is non-negative, child allowances financed by bonds always increase the public debt stock per unit of GDP.

Suggested Citation

  • Yasuoka, Masaya & Miyake, Atsushi, 2012. "Public debt, child allowances, and pension benefits with endogenous fertility," Economics Discussion Papers 2012-47, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwedp:201247
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    References listed on IDEAS

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    More about this item

    Keywords

    public debt; endogenous fertility; child allowances; pension;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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