Replication Package for Raising America's Future: Search for Optimal Child-Related Transfers
Description
Replication Package for "Raising America's Future: Search for Optimal Child-Related Transfers" The US differs from other OECD countries in terms of family policy size and composition. This study examines the welfare and macroeconomic effects of family policy reforms. I explore three policy instruments: child-related tax credits, childcare subsidies, and child allowances. The children are merit good due to pay-as-you-go social security structure. I show that expanding family policy, like the American Rescue Plan, improves welfare. I also define the optimal family policy for the United States. It accounts for about 3% of GDP, three times larger than the existing policy, and primarily focused on childcare subsidies. Family policy structure is critical for welfare evaluation because similar expenditure levels can result in contrasting welfare outcomes depending on policy composition. This study emphasizes the importance of carefully designed family policies, as well as the need for ongoing research and policy innovation to maximize societal benefits and promote equitable economic growth. The package contains Fortran code used for the simulation of the results presented in the study, as well as STATA code used for visualization of the results.
Files
Steps to reproduce
File Structure Overview This package contains four organized folders: - Calibration: Includes data utilized for model calibration. - Fortran_Code: Contains the Fortran project used to generate the results showcased in the paper. - Simulation_Results: Features simulation outcomes, distributed across 8 subfolders to enhance computational efficiency. - Stata_Code_and_Graphs: Here, you will find the Stata project file "_replication.stpr" and the necessary files to recreate the article's figures and tables. Graphs Replication Instructions To replicate the graphs, start by opening "_replication.stpr" and then the "_main.do" file. The file paths are set relatively, ensuring a seamless operation if the original folder structure is maintained. Within this setup, you will encounter three key do-files: - "Fig1_Expenditure_on_family_policies_and_fertility_rate.do" for reproducing the article's Figure 1, which compares U.S. family transfers with those in other OECD countries. - "SimResults.do" for generating Figures 2-6 and Table 2, based on the simulation results from the article. - "Appendix.do" for creating Appendix Figures C1-C9. Simulation Replication Process The simulation results are housed within the "simulation_results" folder. To rerun simulations, open the Fortran project " family_policy.vfproj." You can choose to simulate only the main policies (baseline, ARP, and Optimal Policy) or the full suite of family policy simulations by adjusting the "switch_full_replication" variable in the "main.f90" file to 0 or 1, respectively. By default, the code recalculates only the three principal policy scenarios. Computational Requirements Executing the three main policy scenarios typically requires about 30 minutes on a PC with an AMD Ryzen 7 3700X 8-Core Processor. To replicate all family policies, expect approximately 16 hours and around 2 GB of dedicated memory for the task. The computational process is segmented into 8 parts within "simulation_results" to streamline efficiency. To initiate a specific part of the simulation, modify the "part_to_run" variable in "main_optimal_policy_shape.f90." For instance, setting "part_to_run = 1" means you should transfer the "family_policy.exe" file to the ".\simulation_results\part1" folder and double-click it to commence the simulation. This procedure is consistent for parts 2 through 8. Additional Resources It's important to note that the numerical procedures are based on "Introduction to Computational Economics Using Fortran" by Hans Fehr, Maurice Hofmann, and Fabian Kindermann. Familiarity with this reference and its associated code is highly beneficial for those undertaking the replication efforts.