Children are special, not only to their own parents, but also for society at large. Even if society is not directly interested in children, intervention may still be justified for re-distributive reasons. The fact that children are not transferable, while income is, does in fact bias the first...

The paper innovates on the existing optimal taxation literature by taking fertility as endogenous, and allowing for households to be differentiated by their ability to raise children, as well as by their ability to raise income. In a context where the government cannot observe personal...