Does Pro-Population Policy Raise Per Capita Consumption?

20 Pages Posted: 19 Jul 2007

See all articles by Ken-Ichi Hashimoto

Ken-Ichi Hashimoto

Kobe University - Faculty of Economics

Yoshiyasu Ono

Osaka University - Institute of Social and Economic Research (ISER)

Date Written: July 2007

Abstract

We theoretically analyze the effects of a child allowance, an improvement in the efficiency of child rearing and a labor income tax on the fertility rate and per capita consumption. The effects on per capita consumption are opposite in the absence, and the presence, of unemployment. For example, a child allowance urges people to have more children and allocate more labor to child rearing, decreasing labor supply for the purpose of commodity production. Therefore, under full employment, it decreases per capita consumption. In the presence of unemployment, however, it reduces the deflationary gap and hence stimulates per capita consumption.

Keywords: child allowance, child rearing, endogenous fertility, wage income tax

JEL Classification: E24, J13

Suggested Citation

Hashimoto, Ken-Ichi and Ono, Yoshiyasu, Does Pro-Population Policy Raise Per Capita Consumption? (July 2007). ISER Discussion Paper No. 697. Available at SSRN: https://ssrn.com/abstract=1001606 or http://dx.doi.org/10.2139/ssrn.1001606

Ken-Ichi Hashimoto

Kobe University - Faculty of Economics ( email )

2-1, Rokkodai
Nada-Ku
Kobe, Hyogo, 657-8501
Japan
+81 78 803 6839 (Phone)

Yoshiyasu Ono (Contact Author)

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

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