2024/11/01 by Nicholas Lawson, Dean Spears · 1 voice
Economics, Econometrics and Finance · Social Sciences · #Economic Growth and Productivity #Fiscal Policy and Economic Growth #Gender, Labor, and Family Dynamics
paper · doi:10.1016/j.ehb.2024.101444
openalex publication_date 2024/11/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/05/16
We study policy instruments to correct inefficiently low investment in maternal nutrition in India, where one-fifth of all births occur. We focus on fiscal externalities: healthier babies become more productive adults, who pay more tax. However, parents do not internalize this externality, which, combined with other distortions, results in mothers weighing too little during pregnancy. We calibrate the first sufficient-statistics policy model for the quantitatively important case of fiscal externalities and maternal nutrition in developing countries. The optimal subsidy is large. Yet, welfare gains are even greater from public investment in state capacity to monitor nutrition, enabling targetted incentives. • We study policy instruments to correct low investment in maternal nutrition in India. • Focus on fiscal externalities: healthier babies become more productive adults. • Parents do not internalize externality; mothers weigh too little during pregnancy. • The optimal maternal nutrition subsidy is large. • Even larger welfare gains from including award for meeting threshold weight.