Childcare Allowances and Public Pensions: Welfare and Demographic Effects in an Aging Japan

and Akira Okamoto
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  • Faculty of Economics, Okayama University, 3-1-1, Tsushima-naka, Kita-ku, Okayama-shi,, Okayama 700-8530, Japan
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In this study, reforms on childcare allowances and public pensions are examined in an extended lifecycle simulation model with endogenous fertility. A slight increase in family policies such as childcare allowances leads to increases in the total population but the magnitude of change is not large. As childcare allowances increase, however, the total population is cumulatively and progressively augmented, resulting in substantial growth in the total population and national income in the long run. Furthermore, from a long-term perspective, increases in childcare subsidies or decreases in public pension benefits are potentially Pareto-improving.

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The B.E. Journal of Economic Analysis & Policy (BEJEAP) is an international forum for scholarship that employs microeconomics to analyze issues in business, consumer behavior and public policy. Topics include the interaction of firms, the functioning of markets, the effects of domestic and international policy and the design of organizations and institutions.