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Capital income taxation in endogenous fertility model

Author

Listed:
  • Watanabe, Minoru
  • Miyake, Yusuke
  • Yasuoka, Masaya

Abstract

We build a standard overlapping generations model with endogenous fertility and involuntary unemployment. Being different from a log utility function, the capital income tax affects saving at the model of constant relative risk-averse utility function (CRRA function). In the parameter condition, to have the case of non-substitution between consumption in different periods, the capital income tax raises saving to compensate for consumption in the future. Then, results show that a capital income tax improves fertility and unemployment with no social security system.

Suggested Citation

  • Watanabe, Minoru & Miyake, Yusuke & Yasuoka, Masaya, 2019. "Capital income taxation in endogenous fertility model," MPRA Paper 97721, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:97721
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    File URL: https://mpra.ub.uni-muenchen.de/97721/1/MPRA_paper_97721.pdf
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    References listed on IDEAS

    as
    1. Lars Kunze & Christiane Schuppert, 2010. "Financing social security by taxing capital income: A bad idea?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(3), pages 243-262, September.
    2. Fanti, Luciano & Gori, Luca, 2010. "Child policy solutions for the unemployment problem," Economics Letters, Elsevier, vol. 109(3), pages 147-149, December.
    3. Wang, Leran, 2015. "Fertility and unemployment in a social security system," Economics Letters, Elsevier, vol. 133(C), pages 19-23.
    4. Chamley, Christophe, 1986. "Optimal Taxation of Capital Income in General Equilibrium with Infinite Lives," Econometrica, Econometric Society, vol. 54(3), pages 607-622, May.
    5. van Groezen, Bas & Leers, Theo & Meijdam, Lex, 2003. "Social security and endogenous fertility: pensions and child allowances as siamese twins," Journal of Public Economics, Elsevier, vol. 87(2), pages 233-251, February.
    6. Uhlig, Harald & Yanagawa, Noriyuki, 1996. "Increasing the capital income tax may lead to faster growth," European Economic Review, Elsevier, vol. 40(8), pages 1521-1540, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    capital income tax; fertility; unemployment;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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