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Does Fertility Respond to Financial Incentives ?

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Author Info

  • Guy Laroque

    (Crest)

  • Bernard Salanié

    (Crest)

Abstract

There has been little empirical work evaluating the sensitivity of fertility to nancial incentives at the household level. We put forward an identi cationstrategy that relies on the fact that variation of wages induces variation inbene ts and tax credits among \comparable" households. We implement thisapproach by estimating a discrete choice model of female participation andfertility, using individual data from the French Labor Force Survey and afairly detailed representation of the French tax-bene t system. Our resultssuggest that nancial incentives play a notable role in determining fertilitydecisions in France, both for the rst and for the third child. As an example,an unconditional child bene t with a direct cost of 0:3% of GDP might raisetotal fertility by about 0:3 point.

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Bibliographic Info

Paper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2008-10.

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Length: 46
Date of creation: 2008
Date of revision:
Handle: RePEc:crs:wpaper:2008-10

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  1. Hidehiko Ichimura & Christopher Taber, 2002. "Semiparametric reduced form estimation of tuition subsidies," CeMMAP working papers CWP01/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  2. Michael P. Keane & Kenneth I. Wolpin, 2007. "Exploring The Usefulness Of A Nonrandom Holdout Sample For Model Validation: Welfare Effects On Female Behavior," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(4), pages 1351-1378, November.
  3. Melissa Schettini Kearney, 2002. "Is There an Effect of Incremental Welfare Benefits on Fertility Behavior? A Look at the Family Cap," NBER Working Papers 9093, National Bureau of Economic Research, Inc.
  4. Heckman, James J & Walker, James R, 1990. "The Relationship between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data," Econometrica, Econometric Society, vol. 58(6), pages 1411-41, November.
  5. Richard Blundell & Alan Duncan & Costas Meghir, 1995. "Estimating labour supply responses using tax reforms," IFS Working Papers W95/07, Institute for Fiscal Studies.
  6. Timothy Besley & Anne Case, 1994. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," NBER Working Papers 4956, National Bureau of Economic Research, Inc.
  7. Kevin Milligan, 2005. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 539-555, August.
  8. Cigno, Alessandro, 1986. "Fertility and the Tax-Benefit System: A Reconsideration of the Theory of Family Taxation," Economic Journal, Royal Economic Society, vol. 96(384), pages 1035-51, December.
  9. Alma Cohen & Rajeev Dehejia & Dmitri Romanov, 2007. "Do Financial Incentives Affect Fertility?," NBER Working Papers 13700, National Bureau of Economic Research, Inc.
  10. David Blau & Philip Robins, 1989. "Fertility, Employment, and Child-Care Costs," Demography, Springer, vol. 26(2), pages 287-299, May.
  11. Patricia Apps & Ray Rees, 2010. "Fertility, Female Labor Supply and Public Policy," Working Papers id:2754, eSocialSciences.
  12. Daniela Del Boca, 2002. "The effect of child care and part time opportunities on participation and fertility decisions in Italy," Journal of Population Economics, Springer, vol. 15(3), pages 549-573.
  13. Liliane Brouillette & Claude Felteau & Pierre Lefebvre, 1993. "Les effets des impôts et des allocations familiales sur les comportements de fécondité et de travail des Canadiennes: résultats d'un modèle de choix discrets," Cahiers de recherche CREFE / CREFE Working Papers 10, CREFE, Université du Québec à Montréal.
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  1. Flight's right
    by chris dillow in Stumbling and Mumbling on 2010-11-25 17:39:08
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