ECIN Replication Package for "Optimal Parental Leave Subsidization with Endogenous Fertility and Growth"

<span>We examine the growth and welfare effects of
parental leave subsidization in a life-cycle dynastic model with human capital
externality. Such externality causes higher fertility, less parental time and
expenditure on child human capital, and lower growth and welfare than the efficient
levels. Efficient policies require subsidizing work leave, which includes
parental leave, and labor income financed by a lump-sum tax. Calibration based on the U.S. data implies
that a fully-covered leave duration of 7.8 weeks per parent financed by an
increase in labor income tax would increase the annual growth rate by 0.06
percentage points and welfare by 0.027%.<br></span>