Does Child Support Increase the Number of Children? An Involuntary Employment-Specific Approach

Ryouichi Ikeda ()
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Ryouichi Ikeda: Graduate School of Economics, Osaka University

No 11-22, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: Recently, as low birth rates and the aging of society have intensified, considerable analysis is being conducted using overlapping generations models with endogenous birth rates. However, most previous studies have assumed full employment. Since it is the case that unemployment does exist in reality, this paper employs a labor-union wage-negotiation model that models unemployment to analyze the effects of child-support tax on employment and number of children. First, an increase in child-support tax increases the unemployment rate and decreases capital stock. A new finding is that an increase in unemployment decreases the number of children through decreasing disposable income. Also, when certain conditions are satisfied the number of children per capita in the economy as a whole also decreases with introduction of child-support tax. This paper concludes that excessive child-support tax can have opposite the intended effect. Another new finding is that an increase in the unemployment insurance benefits rate decreases the number of children by decreasing disposable income through increasing unemployment.

Keywords: Child-support; The number of children; Unemployment; Union; Overlapping generations model (search for similar items in EconPapers)
JEL-codes: J13 J51 J64 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2011-06
New Economics Papers: this item is included in nep-dge and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1122

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