In this post, we show that under average elasticity the socially optimal fertility rate is 2.4 in the US, up from today’s 1.7, given that the US has to value 14.28x GDP per additional birth ($1.17mn per birth). Furthermore, in order to achieve this, the US must be willing to spend the equivalent of 3.8% of its GDP ($290K per birth). For context, the existing child tax credit is worth $2000/year, or $26K in present value. We would like to stress that these figures are highly uncertain, due to both the different social benefits from multiple births, and the different estimates of how effective child support is. However, in the main scenario, the US government should seriously consider expanding the child tax credit, and explore smart and ambitious solutions to deal with this demographic problem.
Here’s another from Duncan McClements and Jason Hausenloy. Obviously different opinions can be argued here…
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