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Stochastic Dominance and Demographic Policy Evaluation: A Critique

Serie

  • Staff General Research Papers Archive

Resumen

  • Stochastic dominance (SD) is commonly used to rank income distribution and assess social policies. The literature argues that SD is a robust criterion for policy evaluation because it requires minimal knowledge of the social welfare function. We argue that, on the contrary, SD is not a robust criterion. We do this by carefully introducing micro foundations into a model by Chu and Koo (1990) who use SD to provide support to family-planning programs aiming at reducing the fertility of the poor. We show that fertility restrictions are generally detrimental for both individual and social welfare in spite of the fact that SD holds. Our findings are an application of the Lucas ‘Critique. Keywords: fertility, children, welfare, demographic policies, one child policy, income distribution, stochastic dominance.

fecha de publicación

  • 2013-04

Líneas de investigación

  • Children
  • Demographic Policies
  • Fertility
  • Income Distribution
  • One Child Policy
  • Welfare

Issue

  • 36117