Low Fertility and Long-Run Growth in an Economy with a Large Public Sector

Fécondité basse et croissance à long terme dans une économie à secteur public très développé

Jovan Žamac, Daniel Hallberg and Thomas Lindh
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Jovan Žamac: Institute for Futures Studies
Daniel Hallberg: Institute for Futures Studies

European Journal of Population, 2010, vol. 26, issue 2, No 4, 183-205

Abstract: Abstract Recently it has been suggested that low fertility countries may be caught in a trap that is hard to get out of. One important mechanism in such a trap would be social interaction and its effect on the ideal family size. Such social interaction mechanisms are hard to capture in formal models, therefore we use an agent-based simulation model to investigate the issue. In our experimental setup a stable growth and population path is calibrated to Swedish data using the Swedish social policy setup. The model is provoked into a fertility trap by increasing relative child costs linked to positive growth. Even rather large increases in child benefits are then insufficient to get out of the trap. However, the small number of children temporarily enables the economy to grow faster for several decades. Removing the adaptation of social norms turns out to disarm the trap.

Keywords: Low fertility trap; Social norms; Relative income; Economic growth; Piège de basse fécondité; Normes sociales; Revenu relatif; Croissance économique (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Working Paper: Low fertility and long run growth in an economy with a large public sector (2008)
Working Paper: Low fertility and long run growth in an economy with a large public sector (2008)
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DOI: 10.1007/s10680-009-9184-z

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