Pronatalist Policies:Central Government Responsibilities and Top-Level Design
Due to the positive correlation between population size and technological innovation,there exists a positive externality in fertility,which is intertemporal and inseparable across regions.Since the benefits of high fertility are reaped at the national level,the central government has the principal re-sponsibilities to implement pronatalist policies.Policy design deviating this principle would distort the be-haviors of local governments.In this context,a well-designed pronatalist policy should clearly define the responsibilities between the central and the local governments to achieve a mechanism with incentive compatibility at both the micro and macro level.The core of pronatalist policy is to resolve the conflicts between childbirth and female labor market participation and to prioritize those that both facilitate child-bearing and improve women's competitiveness in the labor market.Personal income tax deduction is one of the policies that meets the above criteria.The top-level design should complete the policy frame-work to effectively include women of childbearing age and implement targeted policies based on the characteristics of different groups.
Pronatalist PolicyExternalitiesCentral Government ResponsibilitiesTop-Level Design