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Grandparental childcare, family allowances and retirement policies

The paper uses an OLG model to study the interaction between policies designed to ensure the sustainability of the pension system, i.e. child allowances and pensions policies, and grandparental childcare. We find that the rise in grandparenting negatively affects the elderly labour supply hampering...

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Bibliographic Details
Published in:International tax and public finance 2024-12, Vol.31 (6), p.1669-1692
Main Authors: Cipriani, Giam Pietro, Fioroni, Tamara
Format: Article
Language:English
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Summary:The paper uses an OLG model to study the interaction between policies designed to ensure the sustainability of the pension system, i.e. child allowances and pensions policies, and grandparental childcare. We find that the rise in grandparenting negatively affects the elderly labour supply hampering the impact of pension policies designed to raise the retirement age and lengthen working lives. Then, we introduce child allowances and find that the impact of child allowances on the fertility rate is influenced by the efficiency of grandparenting in reducing child-rearing costs. Child benefits have a positive impact on fertility only if grandparenting is not very effective at reducing childcare costs. This suggests that the role of grandparents in various countries may partly explain the inconsistency in empirical evidence on the relationship between child benefits and fertility rates. The study also finds that child benefits have a positive impact on the elderly labour supply when grandparenting is efficient.
ISSN:0927-5940
1573-6970
DOI:10.1007/s10797-023-09822-9