Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30727
Authors: 
Blumkin, Tomer
Margalioth, Yoram
Sadka, Efraim
Year of Publication: 
2010
Series/Report no.: 
CESifo working paper 2970
Abstract: 
In this paper, we challenge the conventional wisdom that due to the negative correlation between family size and earning ability, family size can be used as a 'tagging' device, and calls for subsidizing children (via child allowances) to enhance egalitarian objectives. We show that the case for subsidizing children crucially hinges on child allowances being provided on a universal basis. Notably, when child benefits are means-tested, taxing children at the margin (namely, setting the total benefits to decline with the number of children) is socially optimal.
Subjects: 
child allowance
re-distribution
means-testing
universal
tagging
optimal taxation
JEL: 
D60
H20
H50
Document Type: 
Working Paper

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