Michael S. Pollard, PhD

: To evaluate whether lifetime future net tax revenues from an in vitro fertilization (IVF)-conceived child are substantial enough to warrant public subsidy relative to the mean IVF treatment costs required to obtain 1 live birth.

: Mathematical generational accounting model.

: The model estimates direct financial interactions between the IVF-conceived child and the government during the childâ€™s projected lifetime. In the model, we accrue IVF costs required to conceive the child to the government, and then we estimate future net tax revenue to the federal and state governments from this individual, offset by direct financial transfers from the government (eg, child allowances, education, Medicare, and Social Security). We discount lifetime costs and gross tax payments at Treasury Department rates to establish the present value of investing in IVF. We applied US Congressional Budget Office projected changes in tax rates over the course of the model. 

: An IVF-conceived child, average in every respect (eg, future earnings, healthcare consumption, and life expectancy), represents a net positive return to the government. Based on an average employed individual born in 2005, the projected net lifetime tax contribution is US $606,200. Taking into consideration IVF costs and all direct financial interactions, the net present value is US $155,870.

: Lifetime net taxes paid from a child relative to the childâ€™s initial IVF investment represent a 700% net return to the government in discounted US dollars from fully employed individuals. This suggests that removing barriers to IVF would have positive tax benefits for the government, notwithstanding its beneficial effect on overall economic growth.

Financial and legislative barriers to fertility treatments prevent many couples from achieving their desired family size, resulting in fewer children being born. 

The costs attributed to in vitro fertilization (IVF) treatment are insignificant in light of the lifetime net tax contributions of IVF-conceived children. 

Minimizing barriers to fertility treatments is likely to have long-term economic benefits

Based on the US GA model developed by Kotlikoff,

 a basic mathematical model was developed taking the perspective of the US government to estimate the discounted lifetime net tax contribution derived from a single individual. The model describes the financial position between the child and the government during the child&#8217;s projected lifetime. For comparison, the model estimates lifetime net tax contributions for a naturally conceived versus an IVF-conceived child, where the major cost difference is assumed to be IVF treatment costs and any extra costs related to the child&#8217;s care. In this model, we assign IVF costs to the government to assess the merits of funding such a policy. All direct government expenditures and tax contributions were discounted using Treasury Department rates.

Conceptually, there are 3 broad stages in lifetime financial interactions, each with differing components of the financial exchange, as follows: (1) early life, when the government primarily contributes resources to individuals through child tax credits, healthcare, and educational expenses; (2) employment, when individuals begin returning resources to the government through federal, state, and local taxes; and (3) retirement, when the government expends additional resources on Social Security and old-age programs. Two general models are estimated. The first model assumes that individuals graduate from high school and then follow the average higher education, employment, and unemployment trends (hereafter referred to as average employment). The second model assumes full-time education from ages 6 to 19 years, with full-time employment from age 20 years until  retirement at age 65 years (hereafter referred to as full employment). The models assume that successful IVF treatment results in a single live birth (with a mean life expectancy of 79 years) and that the child is identical to a naturally conceived individual.

 In all scenarios, the model includes hospital delivery costs, taking into consideration additional costs frequently accrued to IVF-conceived children attributed to low birth weight.

 Age-graded government expenses and tax contributions were assessed across a hypothetical individual&#8217;s lifetime to derive discounted lifetime net tax contributions using net present value (NPV) calculations and undiscounted lifetime net tax contributions. Following similar GA calculations used to assess US immigration policy, we consider various costs generated and taxes paid.

Revenues collected by the government include federal and state income tax (the national mean rate in this model), corporate tax, excise tax, Federal Insurance Contributions Act tax, Supplemental Medical Insurance contributions, federal retirement tax, property tax, and sales tax. To calculate the accounting models, age profiles of each expenditure and revenue component were identified from existing data sources. Because the models describe financial interactions across an individual&#8217;s lifetime, these age profiles are adjusted to account for depreciation of money over time through the application of a discount rate. The US Congressional Budget Office 2007 projections were used as the basis for estimates of inflation, individual earnings increases, tax rate increases, increases in Supplemental Medical Insurance revenue, and Medicare and Medicaid expenditures.

 Increases in expenditures on schooling are based on historical rates of increase.

 Beyond the period for which these long-term forecasts are available, we assume that particular components grow to keep pace with demographic and productivity growth. A discount rate of 4% was applied to lifetime tax revenue and transfer payments. The discount rate was compounded continuously.

. The mean IVF treatment costs to produce a live birth are considered herein as a further expense unique to an individual conceived using IVF. The national mean cost per IVF treatment cycle in 2003 is US $12,400.

 Cost per live birth is calculated as the mean cost per cycle divided by the age-adjusted probability of a live birth, where the treatment efficacy is known to vary primarily by the age of the mother (ie, lower success rates with older age) and by other factors.

 The age-adjusted cost per live birth is given in 

. Analyses are based primarily on 2 waves of the annual March Current Population Survey.

 The Current Population Survey is a monthly survey of about 50,000 households conducted by the Bureau of the Census for the Bureau of Labor Statistics and is the primary source of information on the labor force characteristics of the US population. The sample is representative of the civilian noninstitutional population. Estimated sales tax revenue is obtained from the Consumer Expenditure Survey, also conducted by the Bureau of Labor Statistics. Government expenditures on congestible goods are obtained from the US Statistical Abstract, following prior work.

 Educational expenditures are taken from the Digest of Education Statistics.

. Given the baseline assumptions for the age profiles of expenditures and revenues, the net financial exchange of an individual at any age is derived in the accounting models simply as the discounted sum of all the economic components up to that age. Specifically, lifetime individual NPV is the discounted sum of all revenues to the government at all ages minus expenditures at all ages as follows:

The projected lifetime net tax contribution trajectories for an average employment naturally conceived child and for an IVF-conceived child are shown in the 

. There is a net increase in government revenue by age 37 years for naturally conceived children versus by age 40 years for an IVF-conceived child. The additional costs attributed to conceiving an IVF child are shown as an increased cost at birth. In all simulations, the financial position between the child and the government changes as the child enters the workforce and again at the point of leaving full-time employment, with a net profit to the taxing authority. In vitro fertilization coverage represents a minor component of the net cost for creation of new taxpayers. 

The projected combined returns to the federal and state governments in lifetime net tax contributions from an IVFconceived child and from a naturally conceived child are given in Table 1. For a naturally conceived child, the mean discounted lifetime tax contribution amounts to US $292,285 for full employment; the projected net undiscounted lifetime tax contribution for a full employment individual born in 2005 is US $1,103,000 (

). For IVF-conceived children, the net undiscounted lifetime tax contribution is similar to that for naturally conceived children even after IVF investment costs are factored into the analysis.

The age at which the financial position between a naturally conceived child and an IVF-conceived child changes with respect to the taxing authority is given in Table 1. We have labeled this as the breakeven age to highlight the age at which the government has  recouped all direct financial transfers (discounted) in the early years to achieve working-age participation. Assuming full employment, the breakeven ages with net profit to the government are 34 years for naturally conceived children and 36 to 38 years for IVF children conceived to mothers younger than 41 years. The difference in the breakeven age for IVF-conceived children compared with naturally conceived children differs by 2 to 5 years depending on variations in increasing IVF investment costs attributed to older mothers.

The principal aim of this research was to assess the net tax contributions of an IVF-conceived child, with the intention of informing future policy directives that may influence access to fertility treatments. In reality, there are many good reasons to justify improved IVF access, including medical need, equity, and respect for an individual&#8217;s human right to a family, and reproductive rights. However, in many countries, including the United States, access to fertility care is limited, and many couples are unable to afford treatment. Based on the results shown herein, one could easily argue on the basis of economics that financial or legislative barriers to IVF treatments for infertile couples should be removed.

: We are grateful for comments and guidance provided by Dr Craig Currie from Cardiff Medical School.

: From Ferring International Center (MPC), St Prex, Switzerland; the RAND Corporation (MSP), Santa Monica, CA; the RAND Corporation (SH), Cambridge, England; the Fertility Centers of Illinois (BR K), Chicago; the Boston IVF and the Department of Obstetrics, Gynecology and Reproductive Biology, Harvard Medical School (SP O), Boston, MA; and the Infertility Center of St Louis at St Lukeâ€™s Hospital (SJS), St Louis, MO. 

: This study was funded by the not-for-profit RAND Corporation and by Ferring International Center.

: Mr Connolly is an employee of Ferring International Center, a funder of this study. Dr Pollard and Mr Hoorens report receiving grant funding from Ferring International Center. Dr Oskowitz is a board member of Columbia Labs, a manufacturer of hormones used in IVF treatment, and reports owning stock in that company. Drs Kaplan and Silber report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article. 

: Concept and design (MPC, MSP, SH, SJS); acquisition of data (MSP); analysis and interpretation of data (MPC, MSP, SPO, SJS); drafting of the manuscript (MPC, MSP, SH, BRK, SPO, SJS); critical revision of the manuscript for important intellectual content (MPC, MSP, SH, BRK, SPO, SJS); statistical analysis (MSP); obtaining funding (MPC, MSP, SH); administrative, technical, or logistic support (MPC); and supervision (MPC). 

: Sherman J. Silber, MD, Infertility Center of St Louis at St Lukeâ€™s Hospital, 224 S Woods Mill Rd, St Louis, MO 63017. E-mail: 

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Articles

We estimate the future net tax contributions from an IVF-conceived child to highlight that removing barriers to fertility treatments can have long-term economic benefits.

Michael S. Pollard, PhD

Articles

Long-term Economic Benefits Attributed to IVF-conceived Children: A Lifetime Tax Calculation