Scandinavian Working Papers in Economics
Arbetsrapport,
Institute for Futures Studies
No 2008:11: Low fertility and long run growth in an economy with a large public sector
Jovan Zamac (), Daniel Hallberg () and Thomas Lindh ()
Additional contact information
Jovan Zamac: Institute for Futures Studies, Postal: Box 591, SE-101 31 Stockholm, Sweden
Daniel Hallberg: Institute for Futures Studies, Postal: Box 591, SE-101 31 Stockholm, Sweden
Thomas Lindh: Institute for Futures Studies, Postal: Box 591, SE-101 31 Stockholm, Sweden
Abstract: There is plenty of evidence that growth has a negative relation to fertility and dependency ratios. 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 provoked into a fertility trap by rising 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
35 pages, October 2008
Price: 25 SEK
Note: ISSN: 1652-120X; ISBN: 978-91-85619-35-1
Full text files
20081208105743filYney5zAsWlUp5McVC0NG.pdf
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