In this study, we attempt to investigate how educational subsidy, childcare allowance and family allowance affect economic growth and income distribution on the basis of simulation models which incorporate intergenerational ability transmission and endogenous fertility. The simulation
results show that financial support for higher education can both increase economic growth and reduce income inequality, especially if the abilities of parent and child are closely correlated. In contrast with educational subsidy, raising childcare allowance or family allowance has limited
impacts on growth and income inequality.
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Document Type: Research Article
Institute of Economic Research, Hitotsubashi University, 2-1 NakaKunitachi,Tokyo 186-8603, Japan
Institute of Economic Research, Hitotsubashi University, 2-1 Naka, KunitachiTokyo 186-8603, Japan
JICA Research Institute, Japan International Cooperation Agency, 10-5 Ichigaya-Honmura-cho, ShinjukuTokyo 162-8433, Japan
Publication date: 2013-06-01
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