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Public Provision of Private Child Goods

Masako Kimura and Daishin Yasui ()
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Daishin Yasui: Graduate School of Economics, Kyoto University

No 662, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: This paper analyzes the public provision of private goods for children in a politicoeconomic model with endogenous fertility. The government provides every child with goods that can also be purchased by parents in private markets, and the level of provision is determined by majority rule. Households with many children benefit from the public provision more than those with fewer children; thus, a political conflict arises between them. The distribution of the number of children across households, which is a crucial factor for determining which group is politically dominant, is endogenously determined by households' fertility decision. The sequential interaction between fertility and political decisions might lead to multiple equilibria: equilibrium with high-fertility and low-private/public-spending-ratio and equilibrium with lowfertility and high-private/public-spending-ratio. Our model could explain the large differences in fertility and structure of child-related spending across countries.

Keywords: Fertility; Publicly Provided Private Goods (search for similar items in EconPapers)
JEL-codes: I28 J13 H42 (search for similar items in EconPapers)
Pages: 33pages
Date: 2008-11
New Economics Papers: this item is included in nep-pbe
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http://www.kier.kyoto-u.ac.jp/DP/DP662.pdf (application/pdf)

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Journal Article: Public provision of private child goods (2009) Downloads
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