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Gender Power, Fertility, and Family Policy

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  • Alexander Kemnitz
  • Marcel Thum

Abstract

The birth of children often shifts the power balance within a family. If family decisions are made according to the spouses’ welfare function, this shift in power may lead to a time consistency problem. The allocation of resources after the birth of children may differ from the ex-ante optimal choice. In a model of cooperative decision making within a family, we show that this time consistency problem leads to a systematic downward bias in fertility choices. By keeping fertility low, families try to mitigate the ex-ante undesired shift in the power balance. This bias in fertility choices provides scope for welfare enhancing policy intervention. We discuss the extent to which existing measures in family policy are suitable to overcome the fertility bias.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3798.

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Date of creation: 2012
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Handle: RePEc:ces:ceswps:_3798

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Keywords: fertility; family policy; household allocation;

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  1. Cigno, Alessandro & Luporini, Annalisa & Pettini, Anna, 2003. "Transfers to families with children as a principal-agent problem," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1165-1177, May.
  2. Hazan, Moshe & Zoabi, Hosny, 2011. "Do Highly Educated Women Choose Smaller Families?," CEPR Discussion Papers 8590, C.E.P.R. Discussion Papers.
  3. Meier, Volker & Wrede, Matthias, 2013. "Reducing the excess burden of subsidizing the stork: Joint taxation, individual taxation, and family tax splitting," Munich Reprints in Economics, University of Munich, Department of Economics 19213, University of Munich, Department of Economics.
  4. Timo Hener, 2010. "Do Couples Bargain over Fertility?: Evidence Based on Child Preference Data," SOEPpapers on Multidisciplinary Panel Data Research 323, DIW Berlin, The German Socio-Economic Panel (SOEP).
  5. Konrad, Kai A & Lommerud, Kjell Erik, 1995. " Family Policy with Non-cooperative Families," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(4), pages 581-601, December.
  6. Shelly Lundberg & Robert A. Pollak, 2001. "Efficiency in Marriage," NBER Working Papers 8642, National Bureau of Economic Research, Inc.
  7. Valérie Lechene & Ian Preston, 2010. "Non cooperative household demand," IFS Working Papers, Institute for Fiscal Studies W10/18, Institute for Fiscal Studies.
  8. Patricia Apps & Ray Rees, 2004. "Fertility, Taxation and Family Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(4), pages 745-763, December.
  9. Kaushik Basu, 2004. "Gender and Say A Model of Household Behavior with Endogenously-determined Balance of Power," Harvard Institute of Economic Research Working Papers 2054, Harvard - Institute of Economic Research.
  10. Matthias Wrede, 2000. "Income Splitting – is it Good for Both Partners in the Marriage?," CESifo Working Paper Series 391, CESifo Group Munich.
  11. Raphaela Hyee & Julio R. Robledo, 2009. "Specialization in the Bargaining Family," Working Papers 640, Queen Mary, University of London, School of Economics and Finance.
  12. Iyigun, Murat & Walsh, Randall P., 2007. "Endogenous gender power, household labor supply and the demographic transition," Journal of Development Economics, Elsevier, vol. 82(1), pages 138-155, January.
  13. Sinn, Hans-Werner, 1997. "The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal For a Partial Transition to a Funded System," CEPR Discussion Papers 1734, C.E.P.R. Discussion Papers.
  14. Galor, Oded & Weil, David N, 1996. "The Gender Gap, Fertility, and Growth," American Economic Review, American Economic Association, vol. 86(3), pages 374-87, June.
  15. Shelly J. Lundberg & Robert A. Pollak & Terence J. Wales, 1997. "Do Husbands and Wives Pool Their Resources? Evidence from the United Kingdom Child Benefit," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 463-480.
  16. Robert A. Pollak, 2005. "Bargaining Power in Marriage: Earnings, Wage Rates and Household Production," NBER Working Papers 11239, National Bureau of Economic Research, Inc.
  17. Cigno, Alessandro, 1992. "Children and Pensions," Journal of Population Economics, Springer, vol. 5(3), pages 175-83, August.
  18. Chiappori, P.A., 1989. "Collective Labour Supply and Welfare," DELTA Working Papers 89-07, DELTA (Ecole normale supérieure).
  19. Robert Fenge & Volker Meier, 2005. "Pensions and fertility incentives," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 28-48, February.
  20. Elisabeth Gugl, 2009. "Income splitting, specialization, and intra-family distribution," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 1050-1071, August.
  21. Rasul, Imran, 2008. "Household bargaining over fertility: Theory and evidence from Malaysia," Journal of Development Economics, Elsevier, vol. 86(2), pages 215-241, June.
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