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on Demographic Economics |
| By: | Sebastian Galiani; Raul A. Sosa |
| Abstract: | Being around babies makes people want babies. We formalize this observation as the empathy channel: exposure to infants in the social environment activates neurobiological mechanisms that increase the desire for parenthood. As children become scarcer, this affective stimulus weakens, further eroding the motivation to have children. We embed the mechanism in a two-group overlapping-generations quantity-quality model. The empathy channel generates a positive externality, since each birth raises others’ desire for children, making the decentralized equilibrium inefficient. We characterize the optimal per-child subsidy and show that the first-order Pigouvian rate substantially overshoots the general-equilibrium optimum. The optimal targeting rule follows a Ramsey-like logic, directing the subsidy at the group with the most externality per fiscal dollar, not the group with the largest externality per child. The calibrated model suggests that the empathy channel can account for 3–33% of the fertility decline, with 13.4% at the baseline. At this baseline, the Pigouvian overshoot is 23–32% and the optimal subsidy raises welfare by 0.22% in consumption-equivalent terms. |
| JEL: | J13 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35021 |
| By: | Leander Andres; Stefan Bauernschuster; Gordon B. Dahl; Helmut Rainer; Simone Schüller |
| Abstract: | This paper studies the impact of birthright citizenship on youth crime. We leverage a German reform which automatically granted birthright citizenship to eligible immigrant children born in Germany after January 1, 2000 and administrative crime data from three federal states. We find that immigrant youth who acquired citizenship at birth are substantially less likely to engage in criminal activity, with estimates indicating a 70% reduction in crime. These results are particularly relevant in light of ongoing debates in the U.S. about abolishing birthright citizenship. Our findings suggest that inclusive citizenship policies can reduce crime and its associated costs, which in turn could strengthen social cohesion. |
| JEL: | J15 K42 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35070 |
| By: | Tomas J. Philipson; Deyu Zhang; Shumaila Abbasi; Noah Fisher |
| Abstract: | This paper estimates the economic value to the United States of eliminating cancer mortality over a 35-year horizon beginning in 2030, which would eliminate 30.7 million cancer deaths with a total mortality burden of 380 million life-years. We quantify the economic value of this substantial reduction in cancer mortality by incorporating the monetized value of increased longevity. To value the longevity gains in monetary terms, we utilize the valuations used by the U.S. federal government in its cost-benefit evaluations of regulations. Eliminating cancer mortality generates $197 trillion in economic benefits over 35 years, corresponding to approximately $16, 282 per American per year, or $41, 684 per American household per year. If cancer elimination is viewed as an R&D investment, it yields an enormous internal rate of return, ranging from 570% to 1, 024%, based on benchmarked R&D costs. In addition, we perform a sensitivity analysis by varying the elimination durations and the degree of success, using the benchmark case scenario in which cancer mortality is reduced by 80 percent over a 20-year transition. This achieves about 70 percent of the total economic value of full elimination above, corresponding to aggregate benefits of about $134 trillion, or approximately $11, 112 per person per year. |
| JEL: | I0 I1 I10 I15 I18 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35052 |