Private and public costs and benefits

expenses incurred when raising a dependant and/or the opportunity cost (foregone earnings) of devoting time to domestic activities such as childrearing and bearing. Relatively minor attention is paid to the measurement of public subsidies (represented by monetary transfers and public provision of services) received by families with dependants and public benefits enjoyed by society when young cohorts replace the olds. The paper aims to estimate the financial relationships between families and the public sector. Then, by comparing private costs to private and public benefits, it investigates the possibility that the overall scenario can be depicted as "demographic free-riding". The estimation of public subsidies follows a microeconomic approach: measuring the overall amount of public resources devoted to families with dependants during their entire lifetime and analysing the way they are given. The main limitation is the neglect of the monetary value of regulations, such as those applied to the labour market, aimed at providing special rights to pregnant women or to parents with infants. Public transfers are relevant not only to the economic analysis of fertility decisions, but also to the measurement of the degree of equity of public policies, as well as to the analysis of social policies carried out by sociologists. In order to derive a concise measure of the financial effect of the various public programmes, the conventional generational accounting methodology will be extended from individuals to families. The objective is to evaluate how public finances redistribute resources within generations when families are taken as the tax units. Initially, income effects alone will