Population policy through tradable procreation entitlements

Tradable permits are now widely used to control pollution. We investigate the implications of setting up such a system in another area population control, either domestically or at the global level. We first generalize the framework withboth tradable procreation allowances and tradable procreation exemptions, in order to tackle both over- and under-population problems. The implications of procreation rights for income inequality and education are contrasted. We decomposethe scheme's impact on redistribution into three effects, one of them, the tradability effect, entails the following: with procreation exemptions or expensive enough procreation allowances, redistribution benefits the poor. In contrast, cheap procreation allowances redistribute resources to the rich. As far as human capital is concerned, natalist policy worsens the average education level of the next generation, while population control enhances it. If procreation rights are granted tocountries in proportion to existing fertility levels (grandfathering) instead of being allocated equally, population control can be made even more redistributive. Our exploratory analysis suggests that procreation entitlements offer a promising tool tocontrol population without necessarily leading to problematic distributive impact, especially at the global level.