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Rawlsian optimal population size

Abstract

In this paper, I examine the implications of the Rawlsian maximin criterion for optimal population size and intergenerational allocation of resource when fertility is endogenous. I show that whenever children are better-off than their parents in laissez-faire, then the size of the population and parental bequests are also optimal according to the Rawlsian criterion. Otherwise, laissez-faire leads to overpopulation and suboptimal bequests. I then show that by using proper price-based corrective policies, society can achieve a Rawlsian optimal allocation. These policies involve either a combination of a subsidy to aggregate future consumption and a per-capita tax on children, or a subsidy to average future consumption.

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For their comments, I thank two anonymous referees. I also thank Assaf Razin and Efraim Sadka for their comments on an earlier draft.

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Spiegel, Y. Rawlsian optimal population size. J Popul Econ 6, 363–373 (1993). https://doi.org/10.1007/BF00599044

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  • DOI: https://doi.org/10.1007/BF00599044

Keywords

  • Population Size
  • Optimal Allocation
  • Future Consumption
  • Optimal Population
  • Corrective Policy