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Gender power, fertility, and family policy

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  • Kemnitz, Alexander
  • Thum, Marcel

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 Dresden University of Technology, Faculty of Business and Economics, Department of Economics in its series Dresden Discussion Paper Series in Economics with number 01/13.

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Date of creation: 2013
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Handle: RePEc:zbw:tuddps:0113

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Keywords: Fertility; Family Policy; Household Allocation;

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  1. Robert Fenge & Volker Meier, 2003. "Pensions and Fertility Incentives," CESifo Working Paper Series 879, CESifo Group Munich.
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  7. Volker Meier & Matthias Wrede, 2013. "Reducing the excess burden of subsidizing the stork: joint taxation, individual taxation, and family tax splitting," Journal of Population Economics, Springer, Springer, vol. 26(3), pages 1195-1207, July.
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  17. 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, C.E.P.R. Discussion Papers 1734, C.E.P.R. Discussion Papers.
  18. Oded Galor & David N. Weil, 1993. "The Gender Gap, Fertility, and Growth," NBER Working Papers 4550, National Bureau of Economic Research, Inc.
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  20. Patricia Apps & Ray Rees, 2004. "Fertility, Taxation and Family Policy," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 106(4), pages 745-763, December.
  21. Cigno, Alessandro, 1992. "Children and Pensions," Journal of Population Economics, Springer, Springer, vol. 5(3), pages 175-83, August.
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