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Pollution Externalities in a Model of Endogenous Fertility and Growth

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  • Poul Schou

Abstract

An endogenous growth model with human capital formation, pollution caused by production of consumption goods, and endogenous fertility decisions made by altruistic agents with infinite horizons is presented. Consequences for optimal policy of modelling fertility as an explicit decision variable are examined. Because ordinary lump-sum transfers to individuals are no longer neutral, either revenue from a pollution tax must be redistributed to dynasties (working as an implicit tax on child births), or lump-sum transfers must be supplemented with an explicit fertility tax. Alternatively, the government can avoid distortions of the fertility decisions by maintaining an appropriate public debt. When abatement is highly productive, it can be optimal to subsidize fertility in order to increase total production. Copyright Kluwer Academic Publishers 2002

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  • Poul Schou, 2002. "Pollution Externalities in a Model of Endogenous Fertility and Growth," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(6), pages 709-725, November.
    • Handle: RePEc:kap:itaxpf:v:9:y:2002:i:6:p:709-725
    DOI: 10.1023/A:1020963114245
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    Cited by:

    1. Reyer Gerlagh & Veronica Lupi & Marzio Galeotti, 2018. "Family Planning and Climate Change," CESifo Working Paper Series 7421, CESifo.
    2. Bretschger, Lucas, 2024. "Green Road is open: Economic Pathway with a carbon price escalator," Journal of Environmental Economics and Management, Elsevier, vol. 127(C).
    3. Peter K. Kruse-Andersen, 2016. "Directed Technical Change and Economic Growth Effects of Environmental Policy," Discussion Papers 16-06, University of Copenhagen. Department of Economics.
    4. Grimaud, Andre & Tournemaine, Frederic, 2007. "Why can an environmental policy tax promote growth through the channel of education?," Ecological Economics, Elsevier, vol. 62(1), pages 27-36, April.
    5. Bretschger, Lucas, 2020. "Malthus in the light of climate change," European Economic Review, Elsevier, vol. 127(C).
    6. Reyer Gerlagh & Veronica Lupi & Marzio Galeotti, 2023. "Fertility and climate change," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 208-252, January.
    7. Frederic Tournemaine & Christopher Tsoukis, 2018. "The Great Transition: Implications From Environmental Policy For The Quality–Quantity Trade-Off In Children-Rearing," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(05), pages 1155-1174, December.
    8. Simone Marsiglio, 2017. "A simple endogenous growth model with endogenous fertility and environmental concern," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(3), pages 263-282, July.
    9. Dimitrios Varvarigos & Intan Zanariah Zakaria, 2011. "Growth and Demographic Change: Do Environmental Factors Matter?," Discussion Papers in Economics 11/46, Division of Economics, School of Business, University of Leicester.
    10. Chen, Jhy-hwa & Shieh, Jhy-yuan & Chang, Juin-jen & Lai, Ching-chong, 2009. "Growth, welfare and transitional dynamics in an endogenously growing economy with abatement labor," Journal of Macroeconomics, Elsevier, vol. 31(3), pages 423-437, September.
    11. Per-Olov Johansson & Bengt Kriström, 2007. "On a clear day you might see an environmental Kuznets curve," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 77-90, May.
    12. Gerlagh, Reyer, 2022. "Climate, Technology, Family Size; on the Crossroad between Two Ultimate Externalities," Other publications TiSEM b6d5b02f-4624-46fd-836a-b, Tilburg University, School of Economics and Management.
    13. Gerlagh, Reyer, 2022. "Climate, Technology, Family Size; on the Crossroad between Two Ultimate Externalities," Discussion Paper 2022-027, Tilburg University, Center for Economic Research.
    14. Frederic Tournemaine & Pongsak Luangaram, 2012. "R&D, human capital, fertility, and growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 923-953, July.
    15. Wei-Bin Zhang, 2014. "Global Economic Growth and Environmental Change," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 64(3), pages 3-29, July-Sept.
    16. Peter K. Kruse-Andersen, 2019. "Directed Technical Change, Environmental Sustainability, and Population Growth," Discussion Papers 19-12, University of Copenhagen. Department of Economics.
    17. Bretschger, Lucas, 2024. "Energy transition and climate change abatement: A macroeconomic analysis," Resource and Energy Economics, Elsevier, vol. 76(C).
    18. repec:awi:wpaper:0428 is not listed on IDEAS
    19. Gerlagh, Reyer, 2023. "Climate, technology, family size; on the crossroad between two ultimate externalities," European Economic Review, Elsevier, vol. 152(C).
    20. Kruse-Andersen, Peter Kjær, 2023. "Directed technical change, environmental sustainability, and population growth," Journal of Environmental Economics and Management, Elsevier, vol. 122(C).
    21. Furukawa, Yuichi & Takarada, Yasuhiro, 2013. "Technological change and international interaction in environmental policies," MPRA Paper 44047, University Library of Munich, Germany.

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