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It Takes a Village: Network Effect of Child-rearing

Yomogida Morihiro and Reiko Aoki

No 275, Discussion Paper from Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University

Abstract: We explore an economy where number of children is endogenously determined and the cost of raising children is determined by the total number of children in the economy. We show that number of children will be too small compared to the social optimum and that the network effect may magnify the decline of "birthrate". Our analysis demonstrates that public policies to increase birthrate must take this into account when determining subsidies.

Date: 2005-06
Note: May 2005
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