EconPapers    
Economics at your fingertips  
 

Optimal Taxation in an Endogenous Fertility Model with Non-Cooperative Couples

Takuya Obara and Yoshitomo Ogawa

No e157, Working Papers from Tokyo Center for Economic Research

Abstract: This study examines the optimal tax structure in an endogenous fertility model with non- cooperative couples. In the model, both child quality and quantity are suboptimal due to the non-cooperative behavior of couples. Moreover, we consider the external effects of children on society and center-based childcare services. In such a unified model, we characterize the formulae for optimal income tax rates, child tax/subsidy rates, and tax/subsidy rates on center-based childcare services. We find that income taxation, not child subsidy, corrects the suboptimal low fertility level caused by the non-cooperative behavior of couples. Child tax tends to be optimal as the required tax revenue becomes higher or the degree of external effects of children on society becomes smaller. Specifically, under the availability of lump-sum taxes and absence of externality of children on society, child tax is desirable to alleviate the deadweight loss from income taxation. Moreover, we explore the condition under which a child subsidy is needed. The subsidy for external childcare services corrects the external effects of children on society, not the non-cooperative behavior of couples.

Pages: 59 pages
Date: 2021-02
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.tcer.or.jp/wp/pdf/e157.pdf (application/pdf)

Related works:
Working Paper: Optimal Taxation in an Endogenous Fertility Model with Non-Cooperative Couples (2021) Downloads
Working Paper: Optimal Taxation in an Endogenous Fertility Model with Non-Cooperative Couples (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tcr:wpaper:e157

Access Statistics for this paper

More papers in Working Papers from Tokyo Center for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2022-11-23
Handle: RePEc:tcr:wpaper:e157