Reproductive health, fairness, and optimal policies

Abstract

We consider an overlapping generations economy in which agents differ through their ability to procreate. Ex‐ante infertile households may incur health expenditure to increase their chances of parenthood. This health heterogeneity generates welfare inequalities that deserve to be ruled out. We explore three different criteria of social evaluation in the long‐run: the utilitarian approach, the ex‐ante egalitarian criterion and the ex‐post egalitarian one. We propose a set of economic instruments to decentralize each solution. To correct for the externalities and health inequalities, both a preventive (a taxation of capital) and a redistributive policy are required. We show that a more egalitarian allocation is associated with higher productive investment but reduced health expenditure and thus, lower population growth.

The Optimal Design of Assisted Reproductive Technologies Policies

“…It will also implement lumpsum taxation /subsidization in the third stage, once uncertainty regarding fertility has realized. 19 In the second stage, before uncertainty realizes, individuals make their choices of labour supply, of consumption and, eventually, of investment in ART, conditional on the taxation scheme. When nature realizes, in the third stage, the government implements (positive or negative) lump-sum taxes, denoted by T i,1 and T i,0 , for all i = 2, 4 who resorted to ART and had a child or not, as well as T i,1 for individuals with types i = 1, 3 with no fecundity problems, so as to redistribute resources between individuals with unequal productivity and fecundity as well as to compensate them for (ex-post) inequalities in realized fertility.…”

“…4 True, in the last decade, economics has started to study the production of children by means of fertility functions where different inputs interact in the production of fertility outcomes (Bhattacharya andChakraborty 2014, Strulik 2017), but the emphasis has been on contraception rather than on reproduction. Exceptions include recent contributions about involuntary childlessness (Gobbi 2013, Baudin et al 2015, Etner et al 2020. But that literature has remained (mainly) positive, and did not examine the optimal fiscal treatment of ART in the context of heterogeneity in earnings and in fecundity.…”

“…In the Appendix, we provide also a complete ranking of gross consumptions, c E i,j 18. Labour supply is independent from having a child since it is decided before agents effectively have a child 19. We consider here individualized linear tax functions for labour income and ART investments together with lump-sum taxation, which is equivalent to non-linear tax schedules.…”

The optimal design of assisted reproductive technologies policies

“…The principle of compensation was applied to several policy issues, such as the taxation of savings (Fleurbaey et al, 2014) or the taxation of inheritance (Fleurbaey et al, 2022) under unequal lifetime. Only two papers focused on the compensation of involuntary infertile individuals: Etner et al (2020) and Leroux et al (2022). Contrary to our model, those papers assume equal wages among individuals, whereas this paper assumes that, on top of differences in fecundity, individuals also differ in wages, and examines the optimal ART policy in that context.…”

The Optimal Design of Assisted Reproductive Technologies Policies

“…In the Appendix, we provide also a complete ranking of gross consumptions, c E i,j 18. Labour supply is independent from having a child since it is decided before agents effectively have a child 19. We consider here individualized linear tax functions for labour income and ART investments together with lump-sum taxation, which is equivalent to non-linear tax schedules.…”