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Financial Incentives, the Timing of Births, Birth Complications, and Newborns’ Health: Evidence from the Abolition of Austria’s Baby Bonus

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    Abstract

    We analyze the fertility and health effects resulting from the abolition of the Austrian baby bonus in January 1997. The abolition of the benefit was publicly announced about ten months in advance, creating the opportunity for prospective parents to (re-)schedule conceptions accordingly. We find robust evidence that, within the month before the abolition, about 8% more children were born as a result of (re-)scheduling conceptions. At the same time, there is no evidence that mothers deliberately manipulated the date of birth through medical intervention. We also find a substantial and significant increase in the fraction of birth complications, but no evidence for any resulting adverse effects on newborns’ health.

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    File URL: http://www.labornrn.at/wp/2011/wp1116.pdf
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    Bibliographic Info

    Paper provided by The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria in its series NRN working papers with number 2011-16.

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    Length: 39 pages
    Date of creation: Nov 2011
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    Handle: RePEc:jku:nrnwps:2011_16

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    Related research

    Keywords: baby bonus; scheduling of conceptions; timing of births; policy announcement; abolition effect; birth complications; medical intervention;

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    1. Stacy Dickert-Conlin & Amitabh Chandra, 1999. "Taxes and the Timing of Birth," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 161-177, February.
    2. Kevin Milligan, 2002. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," NBER Working Papers 8845, National Bureau of Economic Research, Inc.
    3. Sandra E. Black & Paul Devereux & Kjell Salvanes, 2006. "From the Cradle to the Labor Market? The Effect of Birth Weight on Adult Outcomes," CEE Discussion Papers 0061, Centre for the Economics of Education, LSE.
    4. Joshua S. Gans & Andrew Leigh, 2006. "Born on the First of July: An (Un)natural Experiment in Birth Timing," CEPR Discussion Papers 529, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    5. Libertad González, 2011. "The Effects of a Universal Child Benefit," Working Papers 574, Barcelona Graduate School of Economics.
    6. Wojciech Kopczuk & Joel Slemrod, 2003. "Dying to Save Taxes: Evidence from Estate-Tax Returns on the Death Elasticity," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 256-265, May.
    7. Robert Drago & Katina Sawyer & Karina Sheffler & Diana Warren & Mark Wooden, 2009. "Did Australia's Baby Bonus Increase the Fertility Rate?," Melbourne Institute Working Paper Series wp2009n01, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    8. Edith Duclos & Pierre Lefebvre & Philip Merrigan, 2001. "A 'Natural Experiment' on the Economics of Storks: Evidence on the Impact of Differential Family Policy on Fertility Rates in Canada," Cahiers de recherche CREFE / CREFE Working Papers 136, CREFE, Université du Québec à Montréal.
    9. Marcus Tamm, 2009. "The Impact of a Large Parental Leave Benefit Reform on the Timing of Birth around the Day of Implementation," Ruhr Economic Papers 0098, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    10. Kasey Buckles & Daniel M. Hungerman, 2008. "Season of Birth and Later Outcomes: Old Questions, New Answers," NBER Working Papers 14573, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Cristina Borra & Libertad González & Almudena Sevilla-Sanz, 2014. "The Impact of Eliminating a Child Benefit on Birth Timing and Infant Health," Working Papers 707, Barcelona Graduate School of Economics.
    2. Sinclair, Sarah & Boymal, Jonathan & de Silva, Ashton J, 2012. "Is the fertility response to the Australian baby bonus heterogeneous across maternal age? Evidence from Victoria," MPRA Paper 42725, University Library of Munich, Germany.

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