Taxation of labor and capital income in an OLG model with home production and endogenous fertility

Burkhard Heer

No 9/95, Discussion Papers in Econometrics and Statistics from University of Cologne, Institute of Econometrics and Statistics

Abstract: Many developing countries are characterized by a large share of home production. Households allocate their time on both market and non-market activities. The introduction of a tax on labor or capital income induces people to divert from market production to home production. Furthermore, children are often used as an input into home production. In this situationm a higher tax rate on capital income causes not only a decrease in the capital intensity but also an increase in the population growth rate. The effects of a wage tax on economic development are shown to depend on the opportunity costs of raising children. For reasonable parameter values of the tax rate, labor income taxation will reduce capital accumulation and cause a rise in home production. As a result fiscal policy should be combined with population policies.

Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Taxation of labour and capital income in an OLG model with home production and endogenous fertility (2004)
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:zbw:ucdpse:9509

Access Statistics for this paper

More papers in Discussion Papers in Econometrics and Statistics from University of Cologne, Institute of Econometrics and Statistics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().