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

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  • Thomas Baudin

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

There exists a large consensus in the economic literature and in the economic institutions about the legitimacy of policies subsidizing education. This legitimacy lies in the fact that education is a source of positive externalities. In a standard framework of endogenous fertility, the present paper shows that this result is still valid but that subsidizing education also requires to tax births. Indeed, education subsidies decrease the net cost of children such that parents can exhibit a too high fertility rate. Furthemore, when health is introduced as another source of externalities, the model shows that health expenditures have not always to be subsidized. Indeed, the taxation of births plays the role of an indirect subsidy on health expenditures because it decreases the cost of health relatively to the cost of the quantity of children. When the externalities on education are very high relatively to the positive externalities on health, the indirect subsidy on health can exceed the subsidy that is really needed. Then health expenditures have to be taxed. This results are discussed in the light of family policies implemented in China and Sub-Saharan Africa.

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  • Thomas Baudin, 2008. "Family policies : what does the standard endogenous fertility model tell us ?," Post-Print halshs-00275751, HAL.
  • Handle: RePEc:hal:journl:halshs-00275751
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00275751
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    2. Magdalena Smyk & Joanna Tyrowicz & Lucas van der Velde, 2021. "A Cautionary Note on the Reliability of the Online Survey Data: The Case of Wage Indicator," Sociological Methods & Research, , vol. 50(1), pages 429-464, February.
    3. Krzysztof Makarski & Joanna Tyrowicz & Magda Malec, 2018. "Evaluating welfare and economic effects of raised fertility," GRAPE Working Papers 25, GRAPE Group for Research in Applied Economics.
    4. Julio Dávila, 2018. "Internalizing fertility and education externalities on capital returns," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(2), pages 343-373, August.
    5. Stelter, Robert, 2014. "Over-aging: Are present human populations too old?," Thuenen-Series of Applied Economic Theory 137, University of Rostock, Institute of Economics.
    6. Thomas TB Baudin & David De la Croix & Paula Eugenia Gobbi, 2019. "Childlessness and Economic Development: a Survey," Working Papers ECARES 2019-03, ULB -- Universite Libre de Bruxelles.
    7. Ulla Lehmijoki & Tapio Palokangas, 2023. "Optimal Population Policy with Health Care and Lethal Pollution," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 22(1), pages 31-47, January.
    8. Treich, Nicolas & Espinosa, Romain, 2024. "The Animal-Welfare Levy," TSE Working Papers 24-1503, Toulouse School of Economics (TSE).
    9. 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.
    10. Luigi Bonatti & Lorenza Alexandra Lorenzetti, 2022. "Long-Term Economic Implications of Demeny Voting: A Theoretical Analysis," CESifo Working Paper Series 10039, CESifo.
    11. Oliwia Komada, 2023. "Raising America's future: search for optimal child-related transfers," GRAPE Working Papers 84, GRAPE Group for Research in Applied Economics.
    12. Bonatti, Luigi & Lorenzetti, Lorenza Alexandra, 2023. "Long-term economic implications of Demeny voting: A theoretical analysis," Economic Systems, Elsevier, vol. 47(4).
    13. Krzysztof Makarski & Joanna Tyrowicz & Magda Malec, 2019. "Fiscal and Welfare Effects of Raised Fertility in Poland: Overlapping Generations Model Estimates," Population and Development Review, The Population Council, Inc., vol. 45(4), pages 795-818, December.
    14. Luigi Bonatti & Mauro Lorenza Alexandra Lorenzetti, 2022. "Long-term Economic Implications of Demeny. Voting: A Theoretical Analysis," DEM Working Papers 2022/6, Department of Economics and Management.
    15. Nicholas Lawson & Dean Spears, 2018. "Optimal population and exhaustible resource constraints," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(1), pages 295-335, January.
    16. Stelter, Robert, 2016. "Over-aging — Are present-day human populations too old?," Mathematical Social Sciences, Elsevier, vol. 82(C), pages 116-143.
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    More about this item

    Keywords

    mortality; Fertility; education; health; family policy; taxation; mortality.; Fécondité; santé; politique familiale; mortalité.;
    All these keywords.

    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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