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Capital income taxation in endogenous fertility model

Watanabe, Minoru and Miyake, Yusuke and Yasuoka, Masaya (2019): Capital income taxation in endogenous fertility model.

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Abstract

We build a standard overlapping generations model with endogenous fertility and involuntary unemployment. Being different from a log utility function, the capital income tax affects saving at the model of constant relative risk-averse utility function (CRRA function). In the parameter condition, to have the case of non-substitution between consumption in different periods, the capital income tax raises saving to compensate for consumption in the future. Then, results show that a capital income tax improves fertility and unemployment with no social security system.

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