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Subsidy policies in a fertility choice model

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  • Manuel Gómez

Abstract

This paper compares the effects that a subsidy to health expenditure or a subsidy to child-rearing costs has in a fertility choice model in which mortality is also endogenously determined. Whichever subsidy is instituted, the population growth rate rises. While a subsidy to health expenditure reduces welfare, a subsidy to child-rearing costs might increase welfare. The welfare analysis also suggests that a subsidy to health expenditure should be financed by a capital income tax, while a subsidy to child-rearing costs should be financed by a consumption tax. Copyright International Atlantic Economic Society 2001

Suggested Citation

  • Manuel Gómez, 2001. "Subsidy policies in a fertility choice model," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 29(4), pages 438-449, December.
    • Handle: RePEc:kap:atlecj:v:29:y:2001:i:4:p:438-449
    DOI: 10.1007/BF02299332
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