Does Fertility Respond to Financial Incentives?
AbstractThere has been little empirical work evaluating the sensitivity of fertility to financial incentives at the household level. We put forward an identification strategy that relies on the fact that variation of wages induces variation in benefits and tax credits among "comparable households. We implement this approach by estimating a discrete choice model of female participation and fertility, using individual data from the French Labor Force Survey and a fairly detailed representation of the French tax-benefit system. Our results suggest that financial incentives play a notable role in determining fertility decisions in France, both for the first and for the third child. As an example, an unconditional child benefit with a direct cost of 0.3% of GDP might raise total fertility by about 0.3 point.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3575.
Length: 46 pages
Date of creation: Jul 2008
Date of revision:
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Other versions of this item:
- Guy Laroque & Bernard Salanie, 2008. "Does Fertility Respond to Financial Incentives?," Discussion Papers 0708-15, Columbia University, Department of Economics.
- Guy Laroque & Bernard Salanié, 2008. "Does Fertility Respond to Financial Incentives?," CESifo Working Paper Series 2339, CESifo Group Munich.
- Laroque, Guy & Salanié, Bernard, 2005. "Does Fertility Respond to Financial Incentives?," CEPR Discussion Papers 5007, C.E.P.R. Discussion Papers.
- Guy Laroque & Bernard Salanié, 2008. "Does Fertility Respond to Financial Incentives ?," Working Papers 2008-10, Centre de Recherche en Economie et Statistique.
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- H5 - Public Economics - - National Government Expenditures and Related Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-14 (All new papers)
- NEP-DCM-2008-07-14 (Discrete Choice Models)
- NEP-LAB-2008-07-14 (Labour Economics)
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