Posted by: Dirk | March 13, 2007

Gary Becker: Should Marriage be Subsidized?

Gary Becker discusses whether marriage should be subsidized or not. Apparently this is a discussion in both the UK and the USA. The argument is that single parents have more problems with their offspring than married couples. Therefore, a subsidy to married folks should result in less problematic kids. Becker does not supprt this, but that is not my point. The discussion here in Germany on the same subject is completely different. We discuss whether all families deserve a subsidy, or only families with kids. Married couples already benefit from economies of scale anyway (just one household instead of two), and there would be no need to give tax breaks to high-income families with no kids. Becker’s final statement nevertheless also applies to the German discussion:

But even if the tax system could be used effectively in these ways, it involves too much social engineering over choices by adult men and women. Except in extreme cases of child abuse and neglect where parental choices have sizable external effects on children, government interventions in family decisions tend to cause more harm than do good.

It might be interesting to see how birth rates develop in Germany (and Europe) now that the economic slump seems to be over. Better prospects for the the future might be all it needs.

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