The Quantity-Quality Trade-off Revisited: A Case for Taxing Children

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 20.09.2011, 12:15 - 13:30


Presentation by 

Tomer Blumkin (Ben Gurion University)


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, so that subsidizing children (via child allowances) enhances 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 total child benefits to decline with the number of children) is optimal under a broad class of egalitarian objectives.

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