Download This PaperDoes Pro-Population Policy Raise Per Capita Consumption?
20 Pages Posted: 19 Jul 2007
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: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Nominal Wage Adjustment, Demand Shortage And Economic Policy
By Yoshiyasu Ono, Junichiro Ishida, ...
-
Zero Nominal Interest Rates, Unemployment, Excess Reserves and Deflation in a Liquidity Trap
By Yoshiyasu Ono and Ryu-ichiro Murota
-
A Reinterpretation of the Keynesian Consumption Function and Multiplier Effect
By Ryu-ichiro Murota and Yoshiyasu Ono