Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/64611 
Year of Publication: 
2012
Series/Report no.: 
Economics Discussion Papers No. 2012-47
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
The stock of public debt in some developed countries continues to increase because of a lack of tax revenues and the burdens of social security. Many of those developed countries suffer from lower birth rates. Child allowances might help to raise fertility, leading to higher tax revenue in the future because of an increase in the younger population. In this paper, the authors examine whether or not child allowances reduce the public debt stock as a share of Gross Domestic Product (GDP) in an economy with a pension system. As long as the long-run debt ratio is non-negative, child allowances financed by bonds always increase the public debt stock per unit of GDP.
Subjects: 
public debt
endogenous fertility
child allowances
pension
JEL: 
G23
H55
J13
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

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