Family policies in the context of low fertility and social structure

In this paper we investigate the effectiveness of family policies in the context of the structure of a society. We use an agent-based model to analyse the impact of policies on individual fertility decisions and on fertility at the aggregate level. The crucial features of our model are the interactions between family policies and social structure, the agents´ heterogeneity and the structure and influence of the social network. This modelling framework allows us to disentangle the direct effect of family policies (the alleviation of resource constraints) from the indirect effect (the diffusion of fertility intentions caused by the direct effects to peers who are not directly affected by policies). Our results indicate that both fixed and proportional policies have a positive and significant impact on fertility. In addition, the specific characteristics of the social network and social effects do not only relate to fertility, but also influence the effectiveness of family policies. Policymakers aiming to apply a specific policy mix that has proven successful in one country to another country, while ignoring differences in social structure, may fail. Family policies can only be successful if they are designed to take into account the characteristics of the society in which they are implemented.