Family Policies: What Does The Standard Endogenous Fertility Model Tell Us?

Thomas Baudin

No 2009041, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: Very few studies have explored the optimality properties of the "standard model" of fertility where parents must determine their optimal trade-off between quality and quantity. The present paper works to fill that gap and find three main results. First, when there exist positive externalities in the accumulation of human capital, it is optimal to subsidize education and to tax births. Second, when the Social Welfare Function does not consist of the average utility, the social returns on educational investments can be weaker than the private returns when the optimal population growth rate is negative. In this case, the optimal economic policy consists in subsidizing births and taxing education. Finally, when the health expenditure is introduced as another source of positive externalities, it can be optimal to tax the parental health expenditure to decentralize the first-best path even if this expenditure is always too low at the laissez-faire equilibrium.

Keywords: Fertility; Education; Family Policy; Mortality; Quality Quantity Trade-off (search for similar items in EconPapers)
JEL-codes: H21 I0 J13 J18 (search for similar items in EconPapers)
Pages: 40
Date: 2009-12-16
New Economics Papers: this item is included in nep-dge and nep-lab
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http://sites.uclouvain.be/econ/DP/IRES/2009041.pdf (application/pdf)

Related works:
Journal Article: Family Policies: What Does the Standard Endogenous Fertility Model Tell Us? (2011)
Working Paper: Family policies: What does the standard endogenous fertility model tell us? (2011)
Working Paper: Family policies: what does the standard endogenous fertility model tell us ? (2010)
Working Paper: Family policies: what does the standard endogenous fertility model tell us ? (2008)
Working Paper: Family policies: what does the standard endogenous fertility model tell us ? (2008)
Working Paper: Family policies: what does the standard endogenous fertility model tell us? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2009041

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