Reproductive health, fairness, and optimal policies

Johanna Etner (1) , Natacha Raffin (1, 2) , Thomas Seegmuller (3)

1 EconomiX
2 CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation
3 AMSE - Aix-Marseille Sciences Economiques

We consider an overlapping generations economy in which agents differ through their ability to procreate. Ex‐ante infertile households may incur health expenditure to increase their chances of parenthood. This health heterogeneity generates welfare inequalities that deserve to be ruled out. We explore three different criteria of social evaluation in the long‐run: the utilitarian approach, the ex‐ante egalitarian criterion and the ex‐post egalitarian one. We propose a set of economic instruments to decentralize each solution. To correct for the externalities and health inequalities, both a preventive (a taxation of capital) and a redistributive policy are required. We show that a more egalitarian allocation is associated with higher productive investment but reduced health expenditure and thus, lower population growth.

Domains: Quantitative Finance [q-fin]

Johanna Etner, Natacha Raffin, Thomas Seegmuller. Reproductive health, fairness, and optimal policies. Journal of Public Economic Theory, 2020, 22 (5), pp.1213-1244. ⟨10.1111/jpet.12436⟩. ⟨hal-02876965⟩