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Family policies : what does the standard endogenous fertility model tell us ?

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  • BAUDIN, Thomas

    (Université catholique de Louvain, CORE and IRES, B-1348 Louvain-la-Neuve, Belgium)

Abstract

Very few studies have explored the optimality properties of the "standard model" of fertility where parents must determine their optimal trade-off between quality and quantity. The present paper works to fill that gap and find three main results. First, when there exist positive externalities in the accumulation of human capital, it is optimal to subsidize education and to tax births. Second, when the Social Welfare Function does not consist of the average utility, the social returns on educational in- vestments can be weaker than the private returns when the optimal population growth rate is negative. In this case, the optimal economic policy consists in subsidizing births and taxing education. Finally, when the health expenditure is introduced as another source of positive externalities, it can be optimal to tax the parental health expenditure to decentralize the first-best path even if this expenditure is always too low at the laissez-faire equilibrium.

Suggested Citation

  • BAUDIN, Thomas, 2010. "Family policies : what does the standard endogenous fertility model tell us ?," CORE Discussion Papers 2010058, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2010058
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    References listed on IDEAS

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    Cited by:

    1. Joanna Tyrowicz & Magdalena Smyk & Lucas van der Velde, 2018. "A cautionary note on the reliability of the online survey data – the case of Wage Indicator," GRAPE Working Papers 26, GRAPE Group for Research in Applied Economics.
    2. Bruno Lanz & Simon Dietz & Timothy Swanson, 2017. "Global Population Growth, Technology, And Malthusian Constraints: A Quantitative Growth Theoretic Perspective," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58, pages 973-1006, August.
    3. repec:spr:jopoec:v:31:y:2018:i:1:d:10.1007_s00148-017-0665-9 is not listed on IDEAS
    4. Stelter, Robert, 2014. "Over-aging: Are present human populations too old?," Thuenen-Series of Applied Economic Theory 137, University of Rostock, Institute of Economics.
    5. Thomas Baudin, 2012. "The Optimal Trade-Off Between Quality and Quantity with Unknown Number of Survivors," Mathematical Population Studies, Taylor & Francis Journals, vol. 19(2), pages 94-113, April.
    6. Stelter, Robert, 2016. "Over-aging — Are present-day human populations too old?," Mathematical Social Sciences, Elsevier, vol. 82(C), pages 116-143.
    7. Vera Tolstova, 2018. "On the Optimal Progressivity of Higher Education Subsidies: the Role of Endogenous Fertility," CERGE-EI Working Papers wp613, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

    More about this item

    Keywords

    fertility; education; family policy; mortality; quality quantity trade-off;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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