Journal of Population Economics

, Volume 26, Issue 3, pp 1195–1207 | Cite as

Reducing the excess burden of subsidizing the stork: joint taxation, individual taxation, and family tax splitting

  • Volker Meier
  • Matthias Wrede
Original Paper


Analyzing a homogenous household setting with endogenous fertility and endogenous labor supply, we demonstrate that moving from joint taxation to individual taxation and adapting child benefits so as to keep fertility constant entails a Pareto improvement. The change is associated with an increase in labor supply and consumption and a reduction of the marginal income tax, while the child benefit may move in either direction. Similarly, a move from joint taxation to some scheme of family tax splitting increases labor supply and welfare.


Income taxation Fertility Labor supply 

JEL Classification

H21 H24 J22 



We would like to thank two anonymous referees and participants at conferences and seminars at Bamberg, Barcelona, Copenhagen, Essen, Galway, Munich, Tallinn, and Vienna for many valuable and useful comments and suggestions.

Supplementary material

148_2011_400_MOESM1_ESM.pdf (268 kb)
(PDF 267 KB)


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Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of MunichMunichGermany
  2. 2.Ifo Institute for Economic ResearchMunichGermany
  3. 3.CESifoMunichGermany
  4. 4.School of Business and EconomicsUniversity of Erlangen-NurembergNurembergGermany

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