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Vol. 61, No. 2, pp. 117-125 (2010)

“Political Economy of Low Fertility and Intergenerational Income Distribution”
Reiko Aoki (Institute of Economic Research, Hitotsubashi University), Rhema Vaithianathan (Department of Economics, University of Auckland)

Japan has the oldest population and one of the lowest fertility rates in the world. Despite the well recognized need for pronatalist policies Japan lags behind other developed countries in the generosity of its family benefits, due in part to the large voting bloc of those in, or close to, retirement, and the weak political power of parents and children. Intergenerational redistribution of income has become public policy and object of political debate, but not all generations have political representation. We argue that to reverse the trend, Japan should introduce a Demeny Voting rule, which allows parents to vote on behalf of their children. Such a change would signal a commitment to ongoing generous family policies which in turn would increase fertility.