Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/46400 
Year of Publication: 
2011
Series/Report no.: 
CESifo Working Paper No. 3455
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The present paper develops a general equilibrium model with overlapping generations and endogenous fertility in order to analyze the interaction between public policy and household labor supply and fertility decisions. The model's benchmark equilibrium reflects the current family policy consisting of joint taxation of married couples, monetary transfers and in-kind benefits which reduce the time cost of children. Then we simulate alternative reforms of the tax and the child benefit system and analyze the long-run impact on fertility and female labor supply. Our simulations indicate three central results: First, policies which simply increase the family budget either via higher transfers (direct or in-kind) or via family splitting increase fertility but reduce female employment. Second, increasing tax revenues due to the introduction of individual taxation would increase female employment but reduce fertility. Third, revenue neutral policies such as a reform of the benefit structure or a move towards individual taxation combined with an increase in in-kind benefits may achieve both goals and therefore yield significant welfare gains.
Subjects: 
stochastic fertility
general equilibrium life cycle model
JEL: 
J12
J22
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size
261.05 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.