Child allowances, fertility, and chaotic dynamics

Hung Ju Chen, Ming-Chia Li*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

This paper analyzes the dynamics in an overlapping generations model with the provision of child allowances. Fertility is an increasing function of child allowances and there exists a threshold effect of the marginal effect of child allowances on fertility. We show that if the effectiveness of child allowances is sufficiently high, an intermediate-sized tax rate will be enough to generate chaotic dynamics. Besides, a decrease in the inter-temporal elasticity of substitution will prevent the occurrence of irregular cycles.

Original languageEnglish
Article number023106
JournalChaos
Volume23
Issue number2
DOIs
StatePublished - 1 Jan 2013

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