This study was conducted by the Department of Social Policy and Labour Markets for the Robert Bosch Foundation and completed in June 2005 to support the work of the commission on families and demographic change initiated by the Foundation. The study focused on calculations of the fiscal effects in connection with the birth of a child under the current German tax and social system. Model calculations were conducted for a child born in the year 2000 for its entire life-cycle and including also the effects of its own children. Family-policy benefits and public education spending that a child receives in its youth were taken into consideration along with taxes and social insurance contributions paid during and after its working life as well as all other contribution- and tax-financed public services that it receives over a lifetime. The goal of the calculation was to estimate the amount of the fiscal externalities associated with the upbringing and care of a child under current laws, since this can provide important information for future reforms of family policy in Germany.
Keywords: Demographic change, fertility, children; public finance, family policy, education, taxes, social insurance, social policy; public goods, fiscal externalities.
JEL-No.: H 1, H 23, H 4, H5; H 6; J 1, J 21.
Department conducting the study: Social Policy and Labour Markets.
Die fiskalische Bilanz eines Kindes im deutschen Steuer- und Sozialsystem by Martin Werding and Herbert Hofmann ifo Forschungsberichte Munich: Ifo Institute for Economic Research, 2005; 164 p.; 30,- EUR. ISBN 3-88512-447-5
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