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Childbearing Age, Family Allowances, and Social Security

  • Pierre Pestieau


    (University of Liège, HEC-ULg, and CORE, Paris School of Economics and CEPR, Boulevard du Rectorat, bâtiment B31, 4000 Liège, Belgium;)

  • Gregory Ponthiere


    (Paris School of Economics and Ecole Normale Superieure, Paris. 48 boulevard Jourdan, 75014 Paris, France; corresponding author)

Although the optimal public policy under an endogenous number of children has been widely studied, the optimal public intervention under an endogenous timing of births has remained largely unexplored. This paper examines the optimal family policy when the timing of births is chosen by individuals who differ as to how early fertility weakens future earnings. We analyze the design of a policy of family allowances and of public pensions in such a setting, under distinct informational environments. Endogenous childbearing ages is shown to affect the optimal policy through the redistribution across the earnings dimension and the internalization of fertility externalities. Contrary to common practice, children benefits differentiated according to the age of parents can be part of the optimal family policy. Our results are robust to introducing: (i) children as durable “goods”; (ii) education choices; (iii) varying total fertility.

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Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 80 (2013)
Issue (Month): 2 (October)
Pages: 385-413

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Handle: RePEc:sej:ancoec:v:80:2:y:2013:p:385-413
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  1. Philip Merrigan & Yvan St-Pierre, 1995. "A Neoclassical and Econometric analysis of the Timing and Spacing of Births in Canada from 1950 to 1990," Cahiers de recherche du Département des sciences économiques, UQAM 9501, Université du Québec à Montréal, Département des sciences économiques.
  2. Cremer, Helmuth & Gahvari, Firouz & Pestieau, Pierre, 2006. "Pensions with endogenous and stochastic fertility," Journal of Public Economics, Elsevier, vol. 90(12), pages 2303-2321, December.
  3. Hippolyte D'Albis & Emmanuelle Augeraud-Véron & Katheline Schubert, 2010. "Demographic-economic equilibria when the age at motherhood is endogenous," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00547274, HAL.
  4. Pierre Pestieau & Grégory Ponthière, 2011. "Optimal Fertility along the Lifecycle," PSE Working Papers hal-00612609, HAL.
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  6. Cremer, Helmuth & Gahvari, Firouz & Pestieau, Pierre, 2006. "Pensions with Heterogenous Individuals and Endogenous Fertility," CEPR Discussion Papers 5553, C.E.P.R. Discussion Papers.
  7. James R. Walker, 1994. "The Effect of Public Policies on Recent Swedish Fertility Behavior," Labor and Demography 9410001, EconWPA.
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  16. Firouz Gahvari, 2009. "Pensions and fertility: in search of a link," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(4), pages 418-442, August.
  17. Pierre Pestieau & Grégory Ponthière, 2011. "Optimal Fertility along the Lifecycle," Working Papers hal-00612609, HAL.
  18. Siv Gustafsson, 2001. "Optimal age at motherhood. Theoretical and empirical considerations on postponement of maternity in Europe," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(2), pages 225-247.
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  22. Heather Joshi, 2002. "Production, Reproduction, and Education: Women, Children, and Work in a British Perspective," Population and Development Review, The Population Council, Inc., vol. 28(3), pages 445-474.
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