The value of a child born in the European union

Tamás Agh, Katalin Gáspár, Balázs Nagy, Matthieu Lehmann, Z. Kaló

Research output: Contribution to journalArticle

Abstract

The objective of this study is to quantify the value of a child born in 27 EU countries and Switzerland. The Human Capital (HC) approach was used to estimate the social benefit arising from an additional childbirth. The value of a newborn child was calculated by summing up the discounted value of all expected future gross earnings of the individual, including an imputed value for household production. The estimation takes into account life expectancy and the probability of being employed or in household production by age-groups. Input data was obtained from Eurostat and the Human Mortality Database. In 2012, the purchasing power parity adjusted present value (PV) of a newborn child was EUR 108.4 thousand in Bulgaria and EUR 803.6 thousand in Denmark. By applying the actual exchange rates, the difference between the lowest value (EUR 48.8 thousand in Bulgaria) and the highest value (EUR 1.1 million in Switzerland) was increased. The PV was highly sensitive to the discount rate. The fertility interventions are expected to gain popularities among other health priorities as a tool to counter generation ageing. However, in order to enhance fertility among other health priorities, policy-makers must take into account the full social value based on the local estimates.

Original languageEnglish
Pages (from-to)295-309
Number of pages15
JournalActa Oeconomica
Volume68
Issue number2
DOIs
Publication statusPublished - Jun 1 2018

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Keywords

  • Economic model
  • Human capital approach
  • Newborn child
  • Value of life

ASJC Scopus subject areas

  • Economics and Econometrics

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