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Subsidizing the Stork: New Evidence on Tax Incentives and Fertility

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  • Kevin Milligan

    (University of British Columbia)

Abstract

This paper exploits the introduction of a pronatalist transfer policy in the Canadian province of Quebec that paid up to C$8,000 to families having a child. I implement a quasi-experimental strategy by forming treatment and control groups defined by time, jurisdiction, and family type. The incentive was available broadly, rather than to a narrow population as studied in previous work, providing an exceptional opportunity to investigate heterogeneous responses. I find a strong effect of the policy on fertility, and some evidence of a heterogeneous response that may help reconcile these results with previous estimates. 2005 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • 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.
  • Handle: RePEc:tpr:restat:v:87:y:2005:i:3:p:539-555
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    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • J1 - Labor and Demographic Economics - - Demographic Economics

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