New Economics Papers
on Economics of Happiness
Issue of 2009‒04‒18
two papers chosen by

  1. The Efficiency Cost of Child Tax Benefits By Kevin J. Mumford
  2. Valuing A Life: An Assessment from Metro Manila By Rosalina Palanca Tan

  1. By: Kevin J. Mumford
    Abstract: Families with children receive preferential treatment in the U.S. federal income tax. Over the past 15 years, the real value of child tax benefits approximately doubled reaching nearly $1,900 per child in 2006. This paper examines the efficiency cost of providing child tax benefits. A representative agent model is used to show how the efficiency cost of providing child tax benefits depends on labor supply and fertility elasticities. The model reveals that cross-price substitution effect for labor supply and children is of primary importance in calculating the efficiency cost. However, there are no estimates of this parameter in the literature. This paper uses data from the National Longitudinal Survey of Youth (NLSY) to estimate this parameter. The estimated cross-price substitution effect implies that children and time spent outside of employment are complements. This implies that the full cost of providing child tax benefits is larger than the reported tax expenditure.
    Keywords: fertility, income tax, child tax benefits, female labor supply
    JEL: H24 H21 J13
    Date: 2008–11
  2. By: Rosalina Palanca Tan (Department of Economics, Ateneo de Manila University)
    Abstract: Many environmental policies and programmes help save people's lives. However, it can be difficult to assign this key benefit a value.' Because of this, mortality reduction is often not taken into account when potential projects are assessed. This omission can result in projects being undervalued and cancelled. To try and help fill this crucial information gap, a new EEPSEA study from the Philippines has calculated a 'value of life' estimate for children in Metro Manila of between US$0.70 million and US$o.80 million.
    Keywords: Value of life, Manila
    JEL: Q51
    Date: 2008–08

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