| 2024.10.25 (FRI) 10:30-12:00 |
| Macroeconomic and Welfare Effects of Family Policy: Cash Transfers vs In-kind Benefits 早稲田大学 萩原 玲於奈 氏 |
 | A pressing issue facing many advanced countries, including Japan, is finding ways to increase its fertility rates. How do family policies affect household decisions on fertility, labor supply, and welfare? To examine and compare the macroeconomic and welfare effects of expanding cash and in-kind childcare benefits, I develop a general equilibrium overlapping generations model with endogenous fertility for the Japanese economy. The model includes single and married households and assumes that married couples face two trade-offs: child quantity vs. child quality and childcare time vs. working time. Simulation results indicate that both childcare reforms lead to higher fertility rates. The demographic change offers welfare gains for all future households owing to the reduction in social security taxes. These positive effects are expected to be larger in the case of in-kind benefits, as these benefits would also increase the female labor supply. Particularly, in-kind benefits induce highly educated couples with high opportunity costs of having children to increase fertility and welfare by reducing the required time for childcare. |
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