Oliwia and Artur have just come back from 10th Demographic Conference of Young Demographers in Prague. The conference by 4I: incredible city, incredible people, incredible research projects and incredible organization. The conference was organized in a workshop style and intensive interaction between Ph.D. students and a more experienced researcher. Oliwia and Artur enjoyed the great speech by Tomas Sobotka and George Alter. Thomas Sobotka – fertility forecast guru – summed up the driven forces behind fertility patterns observed in the data. George Alter focused on the differences between the fertility transition in Europe and Africa.
Artur present the evaluation of public policies aiming at boosting private savings. Such policies are becoming more and more popular as increasing longevity and declining fertility challenges pension systems around the world. The question remains: are those policies worth their cost? Standard tools are unable to capture the effects of tax incentivized policies that are supposed to increase old-age savings because they assume full rationality. Model enriched with four types of "irrational" behavior produces a very different evaluation of policies. Not only it is different from the evaluation based on a standard framework, but also the standard framework appears to approximate the enriched framework very poorly.
Oliwia presented the first results from her Ph.D. research project. Family policy important role in our society. More than 45 % of countries worldwide have implemented some form of family policy. Government spending on family policy is growing. Different countries implement a different solution. For example, in Poland, 2% of GDP is spent on flat child benefit 500+. In Germany, 1% of GDP is spent on tax exemption connected to fertility level. Different countries use different tools. The common problem is the lack of counterfactual scenario. It makes an evaluation of family policy difficult. Oliwia proposed the OLG model with endogenous fertility choice to analyze family policy effects in a kind of laboratory environment. She compares the effects of 3 policies: flat child benefit, child-related labor tax cut and progressive child benefits. Family policies affect fertility, taxes, labor market and the implications for the pension system. Comparing cost and benefits we can calculate the welfare effects of a given family policy. Results in a nutshell: labor income tax exemption is the most expensive but also the most effective solution.