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Child policy solutions for the unemployment problem

Luciano Fanti () and Luca Gori ()

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: Unemployment and population ageing are probably two of the most important concerns in developed countries. Since reforming labour markets is high on the political agenda, a theoretical knowledge of the possible long-run interaction between unemployment and the childcare system may be highly valuable. Applying a fairly standard OLG model with endogenous fertility and minimum wages, we show that a child tax (rather than the more conventional child subsidy) can be used as an instrument (1) to promote population growth and (2) to reduce unemployment and, in particular, to restore the full employment equilibrium.

Keywords: Child Tax; Fertility; OLG model; Unemployment (search for similar items in EconPapers)
JEL-codes: H24 J13 J18 (search for similar items in EconPapers)
Date: 2009-01-01
New Economics Papers: this item is included in nep-cmp, nep-dge and nep-lab
Note: ISSN 2039-1854
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