Complements Versus Substitutes and Trends in Fertility Choice in Dynastic Models*

Jones, Larry Eugene; Schoonbroodt, Alice

doi:10.1111/j.1468-2354.2010.00597.x

Cited by 46 publications

(37 citation statements)

References 58 publications

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“…Table 1 also reports sensitivity analysis of individual base-case assumptions. Jones, Schoenbroodt, and Tertilt (2008) and Jones and Schoonbroodt (2010) Assuming high values of and b might make sense if one believes fertility is insensitive to economic incentives, but this is a pessimistic assumption here. The fertility path in figure 5 makes clear why.…”

Section: A Base Casementioning

confidence: 99%

“…These assumptions ensure that parent's utility rises at a decreasing rate with the number of children. Jones, Schoenbroodt, and Tertilt (2008) and Jones and Schoonbroodt (2010) show that parent's utility also rises at a decreasing rate with the number of children if utility is negative so > 1 and if is decreasing and convex so b > 1. We allow either .…”

Section: Preferencesmentioning

confidence: 99%

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Calculation of a Population Externality

Bohn

Stuart

2015

American Economic Journal: Economic Policy

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JEL: H23 Keywords: population externality, Pigovian policyHarford (1997, 1998, 2000) shows that when people generate externalities and parents care about children's utility, a birth induces an externality and efficiency requires a child tax or subsidy equal to the induced externality. This is true even if optimal taxes are imposed on underlying externalities. Harford's result matters for policy if induced population externalities are large. We make a case that population externalities may be large. Specifically, we study a maintained hypothesis that greenhouse gas emissions are a serious enough problem that emissions must be restricted, and we show that the induced population externality is large under many assumptions.An intuition for Harford's result here is that two decision variables, emissions and fertility, each require a separate instrument if policy is to be efficient. Suppose a positive optimal tax is imposed on emissions and the revenue is redistributed as equal lump-sums.This introduces a fixed-common-property externality: an additional child means more

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Section: A Base Casementioning

confidence: 99%

Section: Preferencesmentioning

confidence: 99%

Calculation of a Population Externality

Bohn

Stuart

2015

American Economic Journal: Economic Policy

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“…Following Jones and Schoonbroodt (2010), there are three sets of joint parameter restrictions that ensure that utility satisfies the desired monotonicity and concavity properties for BB−type altruism:…”

Section: A11 Utility Specifications In Aggregatesmentioning

confidence: 99%

Property rights and efficiency in OLG models with endogenous fertility

Schoonbroodt

Tertilt

2014

Journal of Economic Theory

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Is there an economic rationale for pronatalist policies? We propose and analyze a particular market failure that leads to inefficiently low fertility in equilibrium. The friction is caused by the lack of ownership of children: if parents have no claim on their children's income, the private benefit from producing a child can be smaller than the social benefit. We analyze an overlapping-generations model with fertility choice and parental altruism. Ownership is modeled as a minimum constraint on transfers from parents to children. Using the efficiency concepts proposed in Golosov, Jones, and Tertilt (2007), we find that whenever the transfer floor is binding, fertility choices are inefficient. Second, we show that the usual conditions for efficiency are not sufficient in this context. Third, in contrast to settings with exogenous fertility, a PAYG social security system cannot be used to implement efficient allocations. To achieve an efficient outcome, government transfers need to be tied to fertility choice. JEL Classification: D6, E1, H55, J13

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“…Several authors focused on the age at which young people leave their parents' homes, and 2 See, for example, Galor and Weil (1996) on women's wages, Doepke (2004) on human capital and child labor laws, Greenwood and Seshadri (2002) on the role of new household technologies, and Jones and Schoonbroodt (2010) on changes in mortality. Papers on the baby boom include Albanesi and Olivetti (2009), Greenwood, Seshadri, and Vandenbroucke (2005), and Doepke, Hazan, and Maoz (2007).…”

Section: Introductionmentioning

confidence: 99%

Families as roommates: Changes in U.S. household size from 1850 to 2000

Salcedo

Schoellman

Tertilt

2012

Quantitative Economics

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Living arrangements have changed enormously over the last two centuries. While the average American today lives in a household of only three people, in 1850 household size was twice that figure. Furthermore, both the number of children and the number of adults in a household have fallen dramatically. We develop a simple theory of household size where living with others is beneficial solely because the costs of household public goods can be shared. In other words, we abstract from intrafamily relations and focus on households as collections of roommates. The model's mechanism is that rising income leads to a falling expenditure share on household public goods, which endogenously makes household formation less beneficial and privacy more attractive. To assess the magnitude of this mechanism, we first calibrate the model to match the relationship between household size, consumption patterns, and income in the cross section at the end of the 20th century. We then project the model back to 1850 by changing income. We find that our proposed mechanism can account for 37 percent of the decline in the number of adults in a household between 1850 and 2000, and for 16 percent of the decline in the number of children.

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Complements Versus Substitutes and Trends in Fertility Choice in Dynastic Models*

Cited by 46 publications

References 58 publications

Calculation of a Population Externality

Calculation of a Population Externality

Property rights and efficiency in OLG models with endogenous fertility

Families as roommates: Changes in U.S. household size from 1850 to 2000

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