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The Value of a Child Born in the European Union

Author

Listed:
  • Tamás Ágh

    (Syreon Research Institute, Budapest, Hungary)

  • Katalin Gáspár

    (Syreon Research Institute, Budapest, Hungary)

  • Balázs Nagy

    (Syreon Research Institute, Budapest, Hungary
    Department of Health Policy and Health Economics, Faculty of Social Sciences, Eötvös Loránd University (ELTE), Budapest, Hungary)

  • Matthieu Lehmann

    (PregLem SA, Geneva, Switzerland)

  • Zoltán Kaló

    (Syreon Research Institute, Budapest, Hungary
    Department of Health Policy and Health Economics, Faculty of Social Sciences, Eötvös Loránd University (ELTE), Budapest, Hungary)

Abstract

The objective of this study is to quantify the value of a child born in 27 EU countries and Switzerland. The Human Capital (HC) approach was used to estimate the social benefit arising from an additional childbirth. The value of a newborn child was calculated by summing up the discounted value of all expected future gross earnings of the individual, including an imputed value for household production. The estimation takes into account life expectancy and the probability of being employed or in household production by age-groups. Input data was obtained from Eurostat and the Human Mortality Database. In 2012, the purchasing power parity adjusted present value (PV) of a newborn child was EUR 108.4 thousand in Bulgaria and EUR 803.6 thousand in Denmark. By applying the actual exchange rates, the difference between the lowest value (EUR 48.8 thousand in Bulgaria) and the highest value (EUR 1.1 million in Switzerland) was increased. The PV was highly sensitive to the discount rate. The fertility interventions are expected to gain popularities among other health priorities as a tool to counter generation ageing. However, in order to enhance fertility among other health priorities, policy-makers must take into account the full social value based on the local estimates.

Suggested Citation

  • Tamás Ágh & Katalin Gáspár & Balázs Nagy & Matthieu Lehmann & Zoltán Kaló, 2018. "The Value of a Child Born in the European Union," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 68(2), pages 295-309, June.
    • Handle: RePEc:aka:aoecon:v:68:y:2018:i:2:p:295-309
    Note: This research was financially supported by Gedeon Richter Plc., Hungary. Authors gratefully acknowledge their support.
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    More about this item

    Keywords

    human capital approach; economic model; value of life; newborn child;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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