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Fertility, Growth and the Financing of Public Education and Health

Author

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  • Palivos, Theodore
  • Scotese, Carol A

Abstract

This paper considers the implications of the financing of government services to children when fertility decisions are endogenously determined. In particular, it is shown that when the services are financed by taxation, the equilibrium outcome is biased away from the socially preferred result. The bias results in higher fertility rates and lower economic growth rates than the efficient social optimum. This arises because each household internalizes the benefits, but not the costs of the tax-financed services. We consider alternative methods of financing the public provision of services and find that a combination of taxation and vouchers can eliminate the bias in the equilibrium outcome.

Suggested Citation

  • Palivos, Theodore & Scotese, Carol A, 1996. "Fertility, Growth and the Financing of Public Education and Health," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(4), pages 415-428, November.
    • Handle: RePEc:spr:jopoec:v:9:y:1996:i:4:p:415-28
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    Cited by:

    1. Leonid Azarnert, 2010. "Free education, fertility and human capital accumulation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(2), pages 449-468, March.
    2. Ben Fine, 1998. "Endogenous Growth Theory: A Critical Assessment," Working Papers 80, Department of Economics, SOAS University of London, UK.

    More about this item

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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