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Financial Incentives and Fertility

Author

Listed:
  • Alma Cohen

    (Tel Aviv University, Harvard Law School, and NBER)

  • Rajeev Dehejia

    (New York University, IZA, and NBER)

  • Dmitri Romanov

    (Central Bureau of Statistics, Israel)

Abstract

Using panel data on over 300,000 Israeli women from 1999 to 2005, we exploit variation in Israel's child subsidy to identify the impact of changes in the price of a marginal child on fertility. We find a positive, statistically significant, and economically meaningful price effect on overall fertility and, consistent with Becker (1960) and Becker and Tomes (1976), a small effect of income on fertility, which is negative at low and positive at high income levels. We also find a price effect on fertility among older women, suggesting that part of the overall effect is due to a reduction in total fertility. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Alma Cohen & Rajeev Dehejia & Dmitri Romanov, 2013. "Financial Incentives and Fertility," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 1-20, March.
    • Handle: RePEc:tpr:restat:v:95:y:2013:i:1:p:1-20
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00342
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    More about this item

    Keywords

    fertility; child subsidies; child allowances;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • K36 - Law and Economics - - Other Substantive Areas of Law - - - Family and Personal Law

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