Fertility , female labour supply , family policy , dynamic programming
Abstract:
We estimate a structural life-cycle model of fertility and female labour supply
and use it to evaluate the effects of a number of key family policy measures
based on data for Germany. Parental leave benefits, child benefits and subsidized
childcare are found to have substantial fertility effects. Without these measures,
completed fertility is estimated to be lower by 6%, 7%, and 10%, respectively. Income
tax splitting, which is fiscally expensive, reduces female labour supply but
has a negligible effect on fertility.
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