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Fertility, Female Labor Supply, and Family Policy

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  • Hans Fehr
  • Daniela Ujhelyiova

Abstract

The present paper develops a general equilibrium model with overlapping generations and endogenous fertility in order to analyze the interaction between public policy and household labor supply and fertility decisions. The model's benchmark equilibrium reflects the current family policy as well as the differential fertility pattern of educational groups in Germany. Then we simulate alternative reforms of child benefits and family taxation that increase the long-run fertility and growth rate of the economy. Our simulations indicate two central results: First, although households are typically hurt by the first-order effects of family policy, it is possible to generate long-run welfare gains due to positive second-order effects from induced changes in the population structure. Second, specific family policies could be designed that yield a joint increase of the fertility rate and female employment rate as observed in cross-country studies.
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  • Hans Fehr & Daniela Ujhelyiova, 2013. "Fertility, Female Labor Supply, and Family Policy," German Economic Review, Verein für Socialpolitik, vol. 14(2), pages 138-165, May.
    • Handle: RePEc:bla: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:

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    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. Petra Németh, 2017. "The Life Cycle Model of the Fertility Choice in Hungary," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(4), pages 5-35.
    4. Robert Fenge & Lisa Stadler, 2014. "Three Family Policies to Reconcile Fertility and Labor Supply," CESifo Working Paper Series 4922, CESifo.
    5. 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).
    6. Hans Fehr & Manuel Kallweit & Fabian Kindermann, 2013. "Reforming Family Taxation in Germany: Labor Supply vs. Insurance Effects," SOEPpapers on Multidisciplinary Panel Data Research 613, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Oliwia Komada, 2023. "Raising America's future: search for optimal child-related transfers," GRAPE Working Papers 84, GRAPE Group for Research in Applied Economics.
    8. Bick, Alexander, 2011. "The quantitative role of child care for female labor force participation and fertility," MPRA Paper 31713, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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