 Family Allowance and Pension Dependent on the Number of Children: Optimality and Neutrality — Reaction to „The Inherent Faults of the State Pension System and the Main Direction of its Improvement” by József BanyárPublic Finance Quarterly, 2020, vol. 65, issue 1, 31-41 Abstract: When it comes to the neutralisation of child-rearing burdens by the state, many experts support the introduction of pensions dependent on the number of children (or dependent on child-rearing) instead of family allowance (and tax allowance) (cf. Kovács ed., 2012). The critical review by Banyár (2019) joins this trend. Leaving external criticism aside, I assess Banyár’s plan of reduced pension of childless people and the remaining family allowance in the simplest possible optimisation model. The relative child consumption plays a key role. My main findings: a) in case of a critical relative value (when the total child consumption of the family equals the parents’ consumption), both pension of the childless and family allowance are dispensable; b) in case of a lower child relative value, the reduced pension of the childless is positive, and family allowance is dispensable; c) in case of a higher relative value, the pension of the childless is zero, but family allowance is indispensable. Keywords: pension system; family allowance; pension dependent on the number of children (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pfq:journl:v:65:y:2020:i:1:p:31-41 Access Statistics for this article More articles in Public Finance Quarterly from Corvinus University of Budapest Contact information at EDIRC. |
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