Daddy Months
22 Pages Posted: 4 Nov 2014
Date Written: October 23, 2014
Abstract
We consider a bargaining model in which husband and wife decide on the allocation of time and disposable income. Since her bargaining power would go down otherwise more strongly, the wife agrees to have a child only if the husband also leaves the labor market for a while. The daddy months subsidy enables the couple to overcome a hold-up problem and thereby improves efficiency. However, the same ruling harms cooperative couples and may also reduce welfare in an endogenous taxation framework.
Keywords: fertility, bargaining, family policy, labor supply
JEL Classification: D13, H21, J13, J18, J22
Suggested Citation: Suggested Citation
Meier, Volker and Rainer, Helmut, Daddy Months (October 23, 2014). CESifo Working Paper Series No. 5033, Available at SSRN: https://ssrn.com/abstract=2518957 or http://dx.doi.org/10.2139/ssrn.2518957
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