Grandparental childcare, family allowances and retirement policies

Giam Pietro Cipriani and Tamara Fioroni ()
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Tamara Fioroni: University of Verona

International Tax and Public Finance, 2024, vol. 31, issue 6, No 9, 1669-1692

Abstract: Abstract The paper uses an OLG model to study the interaction between policies designed to ensure the sustainability of the pension system, i.e. child allowances and pensions policies, and grandparental childcare. We find that the rise in grandparenting negatively affects the elderly labour supply hampering the impact of pension policies designed to raise the retirement age and lengthen working lives. Then, we introduce child allowances and find that the impact of child allowances on the fertility rate is influenced by the efficiency of grandparenting in reducing child-rearing costs. Child benefits have a positive impact on fertility only if grandparenting is not very effective at reducing childcare costs. This suggests that the role of grandparents in various countries may partly explain the inconsistency in empirical evidence on the relationship between child benefits and fertility rates. The study also finds that child benefits have a positive impact on the elderly labour supply when grandparenting is efficient.

Keywords: PAYG pensions; Endogenous retirement; Endogenous fertility; Child policies (search for similar items in EconPapers)
JEL-codes: H2 H55 H8 J13 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10797-023-09822-9

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