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Fertility and the Personal Exemption: Comment

Author

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  • Richard Crump
  • Gopi Shah Goda
  • Kevin J. Mumford

Abstract

One of the most commonly cited studies on the effect of child subsidies on fertility, Whittington, Alm, and Peters (1990), claimed a large positive effect of child tax benefits on fertility using time series methods. We revisit this question in light of recent increases in child tax benefits by replicating this earlier study and extending the analysis. We do not find strong evidence to justify the model specification from the original paper. Moreover, even if the original specification is appropriate, we show that the results are not robust to more general measures of child tax benefits. (JEL H24, J13)

Suggested Citation

  • Richard Crump & Gopi Shah Goda & Kevin J. Mumford, 2011. "Fertility and the Personal Exemption: Comment," American Economic Review, American Economic Association, vol. 101(4), pages 1616-1628, June.
  • Handle: RePEc:aea:aecrev:v:101:y:2011:i:4:p:1616-28
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    References listed on IDEAS

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    1. Carrion-i-Silvestre, Josep Lluís & Kim, Dukpa & Perron, Pierre, 2009. "Gls-Based Unit Root Tests With Multiple Structural Breaks Under Both The Null And The Alternative Hypotheses," Econometric Theory, Cambridge University Press, vol. 25(06), pages 1754-1792, December.
    2. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 1063-1114.
    3. Harvey, David I. & Leybourne, Stephen J. & Taylor, A.M. Robert, 2009. "Unit Root Testing In Practice: Dealing With Uncertainty Over The Trend And Initial Condition," Econometric Theory, Cambridge University Press, vol. 25(03), pages 587-636, June.
    4. Joakim Westerlund & David L. Edgerton, 2007. "New Improved Tests for Cointegration with Structural Breaks," Journal of Time Series Analysis, Wiley Blackwell, vol. 28(2), pages 188-224, March.
    5. Eissa, Nada & Hoynes, Hilary Williamson, 2004. "Taxes and the labor market participation of married couples: the earned income tax credit," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1931-1958, August.
    6. Whittington, Leslie A & Alm, James & Peters, H Elizabeth, 1990. "Fertility and the Personal Exemption: Implicit Pronatalist Policy in the United States," American Economic Review, American Economic Association, vol. 80(3), pages 545-556, June.
    7. Saikkonen, Pentti & Lutkepohl, Helmut, 2000. "Testing for the Cointegrating Rank of a VAR Process with Structural Shifts," Journal of Business & Economic Statistics, American Statistical Association, vol. 18(4), pages 451-464, October.
    8. Richard Crump & Gopi Shah Goda & Kevin J. Mumford, 2011. "Fertility and the Personal Exemption: Comment," American Economic Review, American Economic Association, vol. 101(4), pages 1616-1628, June.
    9. Perron, Pierre & Qu, Zhongjun, 2007. "A simple modification to improve the finite sample properties of Ng and Perron's unit root tests," Economics Letters, Elsevier, vol. 94(1), pages 12-19, January.
    10. Yoichi Arai & Eiji Kurozumi, 2007. "Testing for the Null Hypothesis of Cointegration with a Structural Break," Econometric Reviews, Taylor & Francis Journals, vol. 26(6), pages 705-739.
    11. Daniel Parent & Ling Wang, 2007. "Tax incentives and fertility in Canada: quantum vs tempo effects," Canadian Journal of Economics, Canadian Economics Association, vol. 40(2), pages 371-400, May.
    12. Junsen Zhang & Jason Quan & Peter van Meerbergen, 1994. "The Effect of Tax-Transfer Policies on Fertility in Canada, 1921-88," Journal of Human Resources, University of Wisconsin Press, vol. 29(1), pages 181-201.
    13. 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.
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    Citations

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    Cited by:

    1. Regina T. Riphahn & Frederik Wiynck, 2017. "Fertility effects of child benefits," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(4), pages 1135-1184, October.
    2. Sara LaLumia & James M. Sallee & Nicholas Turner, 2015. "New Evidence on Taxes and the Timing of Birth," American Economic Journal: Economic Policy, American Economic Association, vol. 7(2), pages 258-293, May.
    3. Sara LaLumia & James Sallee, 2013. "The value of honesty: empirical estimates from the case of the missing children," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(2), pages 192-224, April.
    4. Lucia Granelli, 2016. "Family Tax Policy in a Model with Endogenous Fertility à la Barro-Becker," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2016010, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    5. Richard Crump & Gopi Shah Goda & Kevin J. Mumford, 2011. "Fertility and the Personal Exemption: Comment," American Economic Review, American Economic Association, vol. 101(4), pages 1616-1628, June.
    6. Lucia Granelli, 2017. "Family Tax Policy with Heterogeneous Altruistic Households," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2017019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    7. Taryn Ann Galloway & Rannveig Kaldager Hart, 2015. "Effects of income and the cost of children on fertility. Quasi-experimental evidence from Norway," Discussion Papers 828, Statistics Norway, Research Department.
    8. Anthony A. Noce & Dhimtri Qirjo & Namini De Silva, 2016. "Enticing the Stork: Can we Evaluate Pro-Natal Policies Before Having Children?," Economic Affairs, Wiley Blackwell, vol. 36(2), pages 184-202, June.

    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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