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Population policy through tradable procreation entitlements

  • DE LA CROIX, David
  • GOSSERIES, Axel

Tradable permits are now widely used to control pollution. We investigate the implications of setting up such a system in another area population control, either domestically or at the global level. We first generalize the framework withboth tradable procreation allowances and tradable procreation exemptions, in order to tackle both over- and under-population problems. The implications of procreation rights for income inequality and education are contrasted. We decomposethe scheme's impact on redistribution into three effects, one of them, the tradability effect, entails the following: with procreation exemptions or expensive enough procreation allowances, redistribution benefits the poor. In contrast, cheap procreation allowances redistribute resources to the rich. As far as human capital is concerned, natalist policy worsens the average education level of the next generation, while population control enhances it. If procreation rights are granted tocountries in proportion to existing fertility levels (grandfathering) instead of being allocated equally, population control can be made even more redistributive. Our exploratory analysis suggests that procreation entitlements offer a promising tool tocontrol population without necessarily leading to problematic distributive impact, especially at the global level.

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File URL: http://dx.doi.org/10.1111/j.1468-2354.2009.00539.x
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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number 2106.

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Handle: RePEc:cor:louvrp:2106
Note: In : International Economic Review, 50(2), 507-542, 2009
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  1. DE LA CROIX, David & DOEPKE, Matthias, 2001. "Inequality and Growth : Why Differential Fertility Matters," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Gary S. Becker, 1960. "An Economic Analysis of Fertility," NBER Chapters, in: Demographic and Economic Change in Developed Countries, pages 209-240 National Bureau of Economic Research, Inc.
  3. Mikhail Golosov & Larry E. Jones & Michèle Tertilt, 2006. "Efficiency with Endogenous Population Growth," Discussion Papers 05-012, Stanford Institute for Economic Policy Research.
  4. Michael Kremer & Daniel Chen, 2000. "Income-distribution Dynamics with Endogenous Fertility," NBER Working Papers 7530, National Bureau of Economic Research, Inc.
  5. Bohringer, Christoph & Lange, Andreas, 2005. "On the design of optimal grandfathering schemes for emission allowances," European Economic Review, Elsevier, vol. 49(8), pages 2041-2055, November.
  6. Philippe Michel & Bertrand Wigniolle, 2007. "On Efficient Child Making," Economic Theory, Springer, vol. 31(2), pages 307-326, May.
  7. Joskow, Paul L & Schmalensee, Richard & Bailey, Elizabeth M, 1998. "The Market for Sulfur Dioxide Emissions," American Economic Review, American Economic Association, vol. 88(4), pages 669-85, September.
  8. George B. Roberts, Chairman, Universities-National Bureau Committee for Economic Research, 1960. "Demographic and Economic Change in Developed Countries," NBER Books, National Bureau of Economic Research, Inc, number univ60-2, October.
  9. Susan Greenhalgh, 2003. "Science, Modernity, and the Making of China's One-Child Policy," Population and Development Review, The Population Council, Inc., vol. 29(2), pages 163-196.
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