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Do childbirth grants increase the fertility rate? Policy impacts in South Korea

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  • Yeon Jeong Son

    (University of Illinois at Chicago)

Abstract

In response to a low fertility rate, a number of municipalities in South Korea have been providing family benefits in the form of childbirth grants and child allowances. Using panel data for 230 municipalities that spans the years 2001–2014, this paper examines the impacts of family benefits on the fertility rate in Korea. I use the fact that different municipalities began providing the family benefits at different times to estimate the impact of family benefits on fertility rates using a difference-in-differences approach. This study finds a positive effect of family benefits on total fertility rate. Moreover, it finds little evidence of an anticipatory response within municipalities that adopted the policy. Given that a 10 million Korean won increase in family benefits is associated with a 3.5% increase in the total fertility rate, an increase in family benefits of about 44 million Korean won per child would be required to raise the total fertility rate to a safe zone above 1.5 children per woman, where population declines are gradual and easily reversed.

Suggested Citation

  • Yeon Jeong Son, 2018. "Do childbirth grants increase the fertility rate? Policy impacts in South Korea," Review of Economics of the Household, Springer, vol. 16(3), pages 713-735, September.
    • Handle: RePEc:kap:reveho:v:16:y:2018:i:3:d:10.1007_s11150-017-9383-z
    DOI: 10.1007/s11150-017-9383-z
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    References listed on IDEAS

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    Cited by:

    1. Sojung Lim, 2021. "Socioeconomic differentials in fertility in South Korea," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 44(39), pages 941-978.
    2. Jolene Tan, 2023. "Perceptions towards pronatalist policies in Singapore," Journal of Population Research, Springer, vol. 40(3), pages 1-27, September.
    3. Jennifer Glass & Carolyn E. Waldrep, 2023. "Child Allowances and Work-Family Reconciliation Policies: What Best Reduces Child Poverty and Gender Inequality While Enabling Desired Fertility?," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(5), pages 1-57, October.
    4. Mengni Chen & Stuart Gietel-Basten & Paul S. F. Yip, 2020. "Targeting and Mistargeting of Family Policies in High-Income Pacific Asian Societies: A Review of Financial Incentives," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 39(3), pages 389-413, June.

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