The Value of a Child Born in the European Union

Tamás Ágh (), Katalin Gáspár (), Balázs Nagy (), Matthieu Lehmann () and Zoltán Kaló ()
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Tamás Ágh: Syreon Research Institute, Budapest, Hungary
Katalin Gáspár: Syreon Research Institute, Budapest, Hungary
Balázs Nagy: Syreon Research Institute, Budapest, Hungary
Matthieu Lehmann: PregLem SA, Geneva, Switzerland
Zoltán Kaló: Syreon Research Institute, Budapest, Hungary

Acta Oeconomica, 2018, vol. 68, issue 2, 295-309

Abstract: The objective of this study is to quantify the value of a child born in 27 EU countries and Switzerland. The Human Capital (HC) approach was used to estimate the social benefit arising from an additional childbirth. The value of a newborn child was calculated by summing up the discounted value of all expected future gross earnings of the individual, including an imputed value for household production. The estimation takes into account life expectancy and the probability of being employed or in household production by age-groups. Input data was obtained from Eurostat and the Human Mortality Database. In 2012, the purchasing power parity adjusted present value (PV) of a newborn child was EUR 108.4 thousand in Bulgaria and EUR 803.6 thousand in Denmark. By applying the actual exchange rates, the difference between the lowest value (EUR 48.8 thousand in Bulgaria) and the highest value (EUR 1.1 million in Switzerland) was increased. The PV was highly sensitive to the discount rate. The fertility interventions are expected to gain popularities among other health priorities as a tool to counter generation ageing. However, in order to enhance fertility among other health priorities, policy-makers must take into account the full social value based on the local estimates.

Keywords: human capital approach; economic model; value of life; newborn child (search for similar items in EconPapers)
JEL-codes: I18 J13 J17 J24 (search for similar items in EconPapers)
Date: 2018
Note: This research was financially supported by Gedeon Richter Plc., Hungary. Authors gratefully acknowledge their support.
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