Low Fertility and Long-Run Growth in an Economy with a Large Public Sector

Abstract

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 pa th is calibrated to Swedish data and using the Swedish social policy setup. The model is provoked into a fertility trap by increasing 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 Basse fécondité et croissance à long terme dans une économie à secteur public très développé Il a été suggéré récemment que les pays à basse fécondité pourraient être victimes d'un piège dont ils auraient du mal à se dégager. Un mécanisme essentiel dans ce piège serait l'interaction sociale et son effet sur la taille idéale de famille. Des mécanismes de ce type sont difficiles à représenter dans un modèle formel, et c'est pourquoi nous avons eu recours à un modèle de simulation multi-agents pour explorer le processus. Dans notre dispositif expérimental, un modèle de croissance et de population stable est calibré aux données suédoises, en utilisant la configuration suédoise de politique sociale. Le modèle est entraîné dans un piège de fécondité en élevant les coûts relatifs de l'enfant en lien avec la croissance positive. Dans ce cas, même des augmentations importantes des prestations familiales sont insuffisantes pour sortir du piège. Toutefois, le petit nombre d'enfants permet temporairement à l'économie de croître plus rapidement pendant quelques décennies. L'arrêt de l'adaptation aux normes sociales conduit à une neutralisation du piège.Mots-clés : Piège de basse fécondité, Normes sociales, Revenu relatif, Croissance économique 2

Family policies in the context of low fertility and social structure

“…These findings are in line with empirical studies (Gauthier and Hatzius 1997;Björklund 2006;Gauthier 2007;Feyrer, Sacerdote, and Stern 2008;Egger and Radulescu 2012) and microsimulation models (Kalb and Thoresen 2010). Social networks and social effects are also found to affect fertility, which coincides with empirical results (Bühler and Philipov 2005;Philipov, Spéder, and Billari 2006;Balbo and Mills 2011) and with simulation models (Zamac, Hallberg, and Lindh 2010). Moreover, proportional policies contribute more to the indirect effect (increase in intended fertility) while the contribution of fixed policies to the direct effect (reduction of the gap between intended fertility and completed cohort fertility) and indirect effect are approximately equal.…”

Introduction to Special Issue of the European Journal of Population: ‘Economic Consequences of Low Fertility in Europe’

“…With an eye to better informing policy development, contributors Zamac et al (2010) consider the mechanisms by which countries may become caught in (and escape from) a low fertility trap and its economic effects. Using an agent-based simulation model that draws on data and policy from Sweden, they show that an increase in the relative costs of children can cause a fertility trap to occur only if social norms start adapting to lower fertility.…”

Influencing Factors on Fertility Intention of Women University Students: Based on the Theory of Planned Behavior

“…Most developed countries are faced with so-called fertility crisis as birth rates have dropped below the replacement fertility rate. Studies regarding low fertility rates pointed that total fertility rate (TFR) should be maintained upper 2.1 to secure stable population [1][2][3]. In line with declining of global birth rates, Korean National Statistical Office (KOSTAT) reported that the TFR of Korea is 1.2 in 2014 [4].…”