Economic incentives and the timing of births: Evidence from the German parental benefit reform 2007
AbstractEconomic theory suggests that incentives matter for people's decisions. This paper investigates whether this also holds for less self-evident areas of life such as the timing of births. We make use of a nautral experiment when the German government changed its parental benefit system January 1, 2007. The policy changes strongly increased economic incentives for women to postpone delivery to the new year provided that they were employed. The incentives for women not employed were not the same, they could gain slightly from giving birth before the policy change. Applying a difference-in-difference-in-difference approach, we find very strong evidence that women with an employment history near to the end of their term indeed succeeded to shift births and became subject to the new and more generous parental benefit system. We estimate the quantitative impact to correspond to a 5-6 percentage points increased probability to give birth the first seven days of 2007 rather than the last seven days of 2006 for employed women.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Fiscal Studies with number 2009:10.
Length: 20 pages
Date of creation: 12 Oct 2009
Date of revision:
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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
Timing of births; economic incentives; parental benefits; policy reform;
Other versions of this item:
- Michael Neugart & Henry Ohlsson, 2013. "Economic incentives and the timing of births: evidence from the German parental benefit reform of 2007," Journal of Population Economics, Springer, vol. 26(1), pages 87-108, January.
- D19 - Microeconomics - - Household Behavior - - - Other
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-17 (All new papers)
- NEP-LAB-2009-10-17 (Labour Economics)
- NEP-LTV-2009-10-17 (Unemployment, Inequality & Poverty)
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