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Why do the French have more babies

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					 Why do the
 French have
more children?

     Marina Hinterhaeuser
    Europe’s population
  growth rates are falling…
• Italy 0.04%                             • France:
• Austria 0.09%
                                            0.35% !!!
• Germany -0.02%


Figures taken from https://www.odci.gov/cia/publications/factbook/
(CIA Fact book)
Italy, Austria:   Germany:
France:
…WHY??
                  Outline:
•   Possible reason behind the difference
•   Benefits and costs of children
•   Budget constraints
•   French government’s efforts
•   Effect on growth rate
•   Summary and Conclusion
      Cultural Differences?
Germans…                         Too boring?
                                 Too scary?




 Angela Merkel and Oliver Kahn
           Cultural Differences?
French…                                 Sexier??




Moulin Rouge girls and Laetitia Casta
                That can’t be true?!




Heidi Klum, Seal, and Angela Merkel
             Immigration?


According to             Germany
 INSEE:                  relies on
During Jan ’01 – ’04:   immigrants
 64% natural increase   for growth.
 36% immigration
What’s the French
    secret?
 Benefits and Costs of Children
100
 90                              •Costs:
 80
 70                              - education
 60                              - medical care
 50                   Marginal
 40                   Cost       - food/apartment
 30                              - clothes
 20
                                 - presents
 10
  0                              - holidays …
      1   2   3   4
  Benefits and Costs of Children

120
                              • Benefits:
100
                                – Pleasantness
80
                                – Care for you in
                                  the future
60                    Marginal
                      Benefit   – (reproduce your
40
                                  genes)
20

 0
      1   2   3   4
Benefits and Costs of Children
120

100

80

60                                                 Marginal Cost
                                                   Marginal Benefit
40

20

 0
      1 child   2 children 3 children 4 children

                          Note: costs and benefits are different
                                for each household
 Benefits and Costs of Children
            Quick summary:
• Law of diminishing marginal returns

• Here: According to Cost-Benefit
  Principle, parents would decide to have
  2 children

• 2 children not enough to replace 2
  parents for population growth
Budget Constraint
       Government
    subsidises children:
• Liberal maternity leaves
• Part-time work for women
• Some child-care cost covered
• Offers child-care centres for working
  mothers
• Discounts on transportation, cultural
  events
     On top of that:
If a family has three or more
  children:
      tax breaks
      MORE money can be
        received from
        government as
        maternity leave
        compensation
 Benefits and Costs of Children
120                                                • Marginal cost
100                                                  decreases with
80
                                                     the 3rd child
60


40
                                                    Family will
20
                                                    have three
                                                    children
 0                                                 Marginal Cost
      1 child   2 children 3 children 4 children
                                                   Marginal Benefit
Budget Constraint
Why the French do it
      better…
• Other countries also have subsidies,
  such as free education, maternity
  leaves, child-care, etc.

• BUT these things to not provide an
  incentive. They are taken for granted.
Why the French do it
      better…
• By reducing income tax from 3rd child
  onwards, families are given an
  incentive to have more children

  –Marginal Cost decreases
  –Total Utility decreases
   Important Note:
• Incentive is even stronger if
  income taxes are very high:

  –France: up to 40% taxable
  –Germany: up to 42% taxable
  –Hong Kong: <16%

               Figures from: http://www.worldwide-tax.com
          Summary:
• French are not just sexier.
• French government gives incentives
  to parents to have three children
• Reduces the marginal cost of the
  third child
• Increases family’s budget for children
• Many different countries have
  different types of population
  growth issues.

• China limits the number of
  children

• Other countries need more
  children
• If you have any ideas as to what
  policies different countries should
  employ, involving cultural issues,
  please come to me and we can
  have an interesting discussion 
Let’s hope that no culture
       goes extinct




                      Thank you.
              Marina Hinterhaeuser

				
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posted:6/9/2012
language:English
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