Fertility and public debt

Luciano Fanti and Luca Spataro

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

Abstract: Public debt and fertility are two issues of major concern in the current debate about economic policy, especially in countries with below replacement fertility and large debt. In this paper we show that public debt is in general harmful for fertility, in that debt issuing almost ever crowds out fertility. The relationship is reversed only if debt is sufficiently low and the share of capital (labor) in the economy is sufficiently low (high). Hence, our analysis would recommend that developed, capital intensive economies (such as OECD countries) aiming at a fertility recovery should reduce national debt, while developing, labor intensive economies, aiming at reducing fertility, should increase (reduce) national debt only if they are debt virtuous (vicious).

Keywords: overlapping generations; endogenous fertility; debt. (search for similar items in EconPapers)
JEL-codes: D91 E62 H63 J13 (search for similar items in EconPapers)
Date: 2009-09-21
New Economics Papers: this item is included in nep-dge
Note: ISSN 2039-1854
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2009/89

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