Dual Caregiving, Declining Birth Rate, and Economic Sustainability

Quang-Thanh Tran and Akiomi Kitagawa

No 193, Working Papers from Development and Policies Research Center (DEPOCEN), Vietnam

Abstract: This paper employs an overlapping generations model to analyze how placing the burden of caring for both elderly parents and children on the working generation shapes fertility and other economic outcomes. In the model, fertility decisions create intergenerational spillovers. When one generation has fewer children, the next generation faces a heavier caregiving burden for its elderly parents, which in turn discourages childbearing. The model reveals sharply different long-run trajectories depending on the time intensity of caregiving. If care demands are moderate, sustainable growth remains feasible despite these externalities. However, when care becomes highly time-intensive, fertility declines, labor supply contracts, and the economy risks falling into a ``nursing hell," where most time is devoted to caregiving. Policy measures, such as child allowances, can alleviate this dynamic by expanding the number of siblings and reducing the per-capita caregiving burden. Yet if care demands are extremely high from the outset, even such interventions cannot avert structural collapse.

Keywords: dual caregiving; endogenous fertility; overlapping generations; sustainability (search for similar items in EconPapers)
JEL-codes: E13 J13 J14 J22 J24 O11 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2025, Revised 2025-11-14
New Economics Papers: this item is included in nep-dem, nep-dge, nep-env, nep-eur, nep-hea and nep-lma
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Working Paper: Dual Caregiving, Declining Birth Rate, and Economic Sustainability (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:dpc:wpaper:0325

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