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Can fiscal policy spur fertility?

Janusz Kudla () and Konrad Walczyk
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Janusz Kudla: University of Warsaw, Poland
Konrad Walczyk: Warsaw School of Economics, Poland

Equilibrium. Quarterly Journal of Economics and Economic Policy, 2018, vol. 13, issue 2, 167-179

Abstract: Research background: The decreasing fertility rate is a serious problem for policymakers as it affects the pension system as well as private consumption and savings. It seems reasonable to analyze whether fiscal policy may mitigate the low birthrate problem. Purpose of the article: In this paper we strive to answer the question whether fiscal incentives spur fertility if parents are rational. Methods: A theoretical economic model of utility maximization is applied to analyze the impact of fiscal policy on fertility. The conclusions are based on the analysis of comparative statics simulation calibrated for actual data from Poland. Findings & Value added: The results indicate that a substantial fertility effect can be obtained by raising subsidies for children or general benefits for families.

Keywords: fertility; optimal taxation; pronatalistic policy (search for similar items in EconPapers)
JEL-codes: D1 H21 J10 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:pes:ierequ:v:13:y:2018:i:2:p:167-179