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Title: Labor Supply, Fertility, and the Economy
Citation Type: Dissertation/Thesis
Publication Year: 1999
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Abstract: This dissertation creates a dynamic population and labor supply model. This model is linked with the LIFT model of the INFORUM research group. The estimated equations for the fertility and the participation rates are created from both a cross-section study of the U.S. decennial censuses, and from a time-series analysis of age-specific fertility and participation rates.The cross-section analysis includes a detailed study of the effects of the Earned Income Tax Credit (EITC) on fertility. Across a number of specifications and samples the EITC is found to positively effect the probability of observing a birth.A number of simulations of the model are presented and show that there are important relationships between the economy and population that can only be addressed with a fully endogenous population model. The DPM model is compared with the 1997 Social Security Administration (SSA) projections for fertility and participation rates. The simulations show that the SSA boundaries are in fact bounds on reasonable forecasts of fertility and labor force participation. However, the simulations call into question the ability to use SSA forecasts for policy analysis.Finally, this dissertation explores the effects of the 1997 Family Tax Relief Act enacted by Congress. The act, among other things, created a $500 child tax credits for families with dependent children and less than $110,000 in income. The simulations suggest that the credit (if allowed to grow with prices) will increase fertility in 1998 by 9% and in 1999 by 21%. These increases have profound impacts on the population and the economy. The young increasingly dominate the population. The economy initially experiences a decline in growth due to reductions in the female labor force participation rates. However, later in the forecast the economy experiences increased growth and a change in the distribution of output.
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Authors: Dowd, Timothy
Institution: University of Maryland at College Park
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Degree: Doctor of Philosophy
Publisher Location: College Park, MD
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Topics: Fertility and Mortality, Labor Force and Occupational Structure
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