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The Fertility Response to Cutting Child-Related Welfare Benefits

Author

Listed:
  • Malte Sandner

    (Technical University Nürnberg)

  • Frederik Wiynck

    (Nuremberg Institute of Technology & Institute for Employment Research)

Abstract

Despite long-term interest in whether welfare benefits motivate fertility, evidence from research has not been consistent. This paper contributes new evidence to this debate by investigating the fertility effect of a German welfare reform. The reform decreased the household income of families on welfare by 18% in the first year after the birth of a baby. Using exclusive access to German social security data on over 460,000 affected women, our analysis finds that the reform leads to a fertility reduction of 6.8%. This result implies that for mothers on welfare, fertility has an income elasticity of 0.38, which is much smaller than that of general populations reported in the literature. Our findings suggest that welfare recipients' fertility reacts less strongly to financial incentives than the fertility of overall populations.

Suggested Citation

  • Malte Sandner & Frederik Wiynck, 2023. "The Fertility Response to Cutting Child-Related Welfare Benefits," Working Papers 2023-003, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2023-003
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    References listed on IDEAS

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    More about this item

    Keywords

    welfare benefits; fertility; parental leave;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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