Why do the French have more children?
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Why do the Why do the French have French have
more children?more children?
Marina Hinterhaeuser
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Europe’s population growth rates are falling…
• Italy 0.04%
• Austria 0.09%
• Germany -0.02%
• France: France: 0.35% !!!0.35% !!!
Figures taken from https://www.odci.gov/cia/publications/factbook/(CIA Fact book)
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Italy, Austria: Germany:
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France:
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…WHY??
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Outline:
• Possible reason behind the difference
• Benefits and costs of children
• Budget constraints
• French government’s efforts
• Effect on growth rate
• Summary and Conclusion
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Cultural Differences?
Germans… Too boring? Too scary?
Angela Merkel and Oliver Kahn
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Cultural Differences?
French… Sexier??
Moulin Rouge girls and Laetitia Casta
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That can’t be true?!
Heidi Klum, Seal, and Angela Merkel
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Immigration?
According to INSEE:
During Jan ’01 – ’04:64% natural increase36% immigration
Germany relies on
immigrants for growth.
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What’s the French secret?
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Benefits and Costs of Children
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MarginalCost
•Costs:
- education - medical care - food/apartment - clothes - presents - holidays …
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Benefits and Costs of Children
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• Benefits:
– Pleasantness
– Care for you in the future
– (reproduce your genes)
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Benefits and Costs of Children
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Note: costs and benefits are different for each household
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Benefits and Costs of ChildrenQuick 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
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Budget Constraint
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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
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On top of that: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
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Benefits and Costs of Children
• Marginal cost decreases with the 3rd child
Family will have three children
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1 child 2 children 3 children 4 childrenMarginal Cost
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Budget Constraint
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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.
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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
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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
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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
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• Many different countries have different types of population growth issues.
• China limits the number of children
• Other countries need more children
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• 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
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Let’s hope that no culture Let’s hope that no culture goes extinctgoes extinct
Thank you.Marina Hinterhaeuser