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)
   

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, 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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