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Fertility and Financial Incentives in France

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  • Laroque, Guy
  • Salanié, Bernard

Abstract

Commentators have often linked the increase in births in France since 1995 to more generous family benefits. We study here empirically the link between fertility and financial incentives by estimating and simulating a joint structural model of participation and fertility on a sample of French women. Our results suggest that fertility responds to incentives in a non-negligible way. The results, however, also have some puzzling features: financial incentives appear to have much stronger effects on low-parity births.

Suggested Citation

  • Laroque, Guy & Salanié, Bernard, 2003. "Fertility and Financial Incentives in France," CEPR Discussion Papers 4064, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:4064
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    References listed on IDEAS

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    1. Marco Francesconi, 2002. "A Joint Dynamic Model of Fertility and Work of Married Women," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 336-380, Part.
    2. Liliane Brouillette & Claude Felteau & Pierre Lefebvre, 1993. "Les effets des impôts et des allocations familiales sur les comportements de fécondité et de travail des Canadiennes: résultats d'un modèle de choix discrets," Cahiers de recherche CREFE / CREFE Working Papers 10, CREFE, Université du Québec à Montréal.
    3. Heckman, James J & Walker, James R, 1990. "The Relationship between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data," Econometrica, Econometric Society, vol. 58(6), pages 1411-1441, November.
    4. Rosenzweig, Mark R & Schultz, T Paul, 1985. "The Demand for and Supply of Births: Fertility and Its Life Cycle Consequences," American Economic Review, American Economic Association, vol. 75(5), pages 992-1015, December.
    5. Joseph Hotz, V. & Klerman, Jacob Alex & Willis, Robert J., 1993. "The economics of fertility in developed countries," Handbook of Population and Family Economics,in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 7, pages 275-347 Elsevier.
    6. 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.
    7. Michael P. Keane & Kenneth I. Wolpin, 2002. "Estimating Welfare Effects Consistent with Forward-Looking Behavior. Part II: Empirical Results," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 600-622.
    8. Apps, Patricia & Rees, Ray, 2001. "Fertility, Female Labor Supply and Public Policy," IZA Discussion Papers 409, Institute for the Study of Labor (IZA).
    9. Cigno, Alessandro, 1986. "Fertility and the Tax-Benefit System: A Reconsideration of the Theory of Family Taxation," Economic Journal, Royal Economic Society, vol. 96(384), pages 1035-1051, December.
    10. Guy Laroque & Bernard Salanie, 2002. "Labour market institutions and employment in France," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 17(1), pages 25-48.
    11. Michael P. Keane & Kenneth I. Wolpin, 2002. "Estimating Welfare Effects Consistent with Forward-Looking Behavior. Part I: Lessons from a Simulation Exercise," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 570-599.
    12. Butz, William P & Ward, Michael P, 1979. "The Emergence of Countercyclical U.S. Fertility," American Economic Review, American Economic Association, vol. 69(3), pages 318-328, June.
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    More about this item

    Keywords

    fertility; incentives;

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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