The Effect of Child Allowances and Public Spending on Fertility 

South Korea’s fertility rate fell below the replacement level in 1983 and has continued to decline. It reached the world’s lowest at 0.72 in 2023. This study evaluates the effectiveness of government policies in raising the Total Fertility Rate (TFR) by developing a three-period overlapping generations model with endogenous fertility and government interventions through income taxation, parental leave payments, child allowances, and public education funding. Calibrated to South Korean data, our simulations show that increasing child allowances is the most effective policy to boost TFR. However, the increase in fertility comes at the cost of reduced human capital growth and lower output and consumption per worker. Our findings also reveal that the high cost of private education significantly deters higher fertility.

Structural Transformation in an Open Economy (Download)

This paper investigates the influence of international trade on structural transformation (ST) in emerging economies. Analyzing rapidly growing, trade-dependent countries such as South Korea, Singapore, and Malaysia, we observe deviations from standard ST patterns: these economies maintain unusually high manufacturing shares in both production and trade, with the volume of service trade exceeding that of agriculture. To explain these anomalies, we develop a general equilibrium model for open economies that incorporates both tradable and non-tradable services. Our findings suggest that partial tradability of services accelerates the shift of resources toward the service sector, reducing the manufacturing share. However, in economies with strong manufacturing productivity, the decline in the manufacturing share is mitigated by sustained competitiveness in manufacturing. These results underscore the importance of service tradability and sector-specific productivity growth in understanding ST in rapid-growing economies.

The Effects of Paternity Leave Policy on Fertility Rate

This paper will investigate the effect of paternity leave policy on total fertility rates. The model incorporates non-unitary households and gender-specific parental leave policy. This analysis is motivated by the observation that, in many developed countries, parental leave is predominantly utilized by women, while utilization by men is significantly lower. Our hypothesis is that promoting paternity leave may alleviate the perceived disadvantage faced by women in their careers and potentially increase fertility rates, or at least mitigate the trends of declining fertility. 

The Effect of Government Policies on Fertility and Pension

Building upon my job market paper, I am currently working on the model that incorporates pension benefits to reflect household decisions more realistically. Including pension benefits allows for a comprehensive examination of how government policies impact fertility rates and labor supply decisions over the life cycle. This extension highlights the trade-offs households face between raising children, participating in the workforce, and planning for retirement.