Fertility Differentials and the Regressive Effect of Public Debt.

This paper shows that public debt issue may be regressive given the following three conditions: that the number of children varies among families; that a bequest motive implies operative intergenerational transfers; and that debt finance of government expenditure postpones its actual payment to the next generation. Though perhaps minor, this effect of fertility differentials ought to be considered when assessing the overall distributive incidence of debt finance as compared to tax finance. Copyright 1987 by The Review of Economic Studies Limited.