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Fertility, Female Labor Supply, and Family Policy‡

Author

Listed:
  • Fehr Hans

    (University of Würzburg, Sanderring 2, Würzburg, Germany)

  • Ujhelyiova Daniela

    (University of Wärzburg, Würzburg, Germany)

Abstract

The present paper develops an overlapping generations general equilibrium model for Germany in order to study the impact of public policy on household labor supply and fertility decisions. Starting from a benchmark equilibrium which reflects the current German family policy regime we introduce various reforms of the tax and child benefit system and quantify the consequences for birth rates and female labor supply. Our simulations indicate three central results: First, higher transfers to families (either direct, in-kind or via family splitting) may increase birth rates significantly, but they may come at the cost of lower female employment. Second, the introduction of individual taxation (instead of joint taxation of couples) would increase female employment but might further reduce current birth rates in Germany. Third, it is possible to increase birth rates and female employment rates simultaneously if the government invests in child care facilities for children of all ages.

Suggested Citation

  • Fehr Hans & Ujhelyiova Daniela, 2013. "Fertility, Female Labor Supply, and Family Policy‡," German Economic Review, De Gruyter, vol. 14(2), pages 138-165, May.
    • Handle: RePEc:bpj:germec:v:14:y:2013:i:2:p:138-165
    DOI: 10.1111/j.1468-0475.2012.00568.x
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    Cited by:

    1. Doepke, Matthias & Hannusch, Anne & Kindermann, Fabian & Tertilt, Michèle, 2022. "The Economics of Fertility: A New Era," IZA Discussion Papers 15224, Institute of Labor Economics (IZA).
    2. Koka, Katerina & Rapallini, Chiara, 2023. "Italy’s demographic trap: Voting for childcare subsidies and fertility outcomes," European Journal of Political Economy, Elsevier, vol. 76(C).
    3. Charlotte H. Feldhoff, 2021. "The Child Penalty: Implications of Parenthood on Labour Market Outcomes for Men and Women in Germany," SOEPpapers on Multidisciplinary Panel Data Research 1120, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Oliwia Komada, 2023. "Raising America's future: search for optimal child-related transfers," GRAPE Working Papers 84, GRAPE Group for Research in Applied Economics.

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