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Fertility and public debt

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  • Luciano Fanti
  • Spataro Luca

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).

Suggested Citation

  • Luciano Fanti & Spataro Luca, 2009. "Fertility and public debt," Discussion Papers 2009/89, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    • Handle: RePEc:pie:dsedps:2009/89
    Note: ISSN 2039-1854
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    File URL: https://www.ec.unipi.it/documents/Ricerca/papers/2009-89.pdf
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    References listed on IDEAS

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    8. Strulik, Holger, 1999. "Demographic Transition, Stagnation, and Demoeconomic Cycles in a Model for the Less Developed Economy," Journal of Macroeconomics, Elsevier, vol. 21(2), pages 397-413, April.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Want more babies? Reduce public debt
      by Economic Logician in Economic Logic on 2009-10-28 19:32:00

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    Cited by:

    1. Luca Spataro & Luciano Fanti, 2013. "From Malthusian to Modern fertility: When intergenerational transfers matter," Discussion Papers 2013/163, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    2. Spataro Luca & Fanti Luciano, 2011. "The Optimal Level of Debt in an OLG Model with Endogenous Fertility," German Economic Review, De Gruyter, vol. 12(3), pages 351-369, August.

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    More about this item

    Keywords

    overlapping generations; endogenous fertility; debt.;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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