This paper models a two-period overlapping generations economy in the steady state where the realization of the quantity/quality number of children depends on an initial investment in children and on a random shock. It shows that the implementation of the first-best allocation, in which the...

Atkinson and Stiglitz (1976) uniform commodity tax result does not hold when (at least) one of the goods is produced within the household. The result is restored if preferences are weakly-separable in market goods versus leisure and household goods.

We show that the celebrated Atkinson and Stiglitz (1976) result on the uniformity of the commodity tax rates when preferences are weakly separable between goods and leisure does not hold when (at least) one of the goods is produced within the household. The result is restored if preferences are...