Low Fertility and Long Run Growth in an Economy with a Large Public Sector
Publication year: 2008
Jovan Zamac, Daniel Hallberg and Thomas Lindh
An important mechanism in low fertility countries is social interactions and its effects on ideal family size; as this is hard to capture in formal models, this paper uses an agent based simulation model to investigate the issue. Through simulating increases in costs of having children, it shows that even radical increases in child benefit are not enough to avoid a low fertility trap and that social norms can have significant effects on that trap.