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Does Fertility Respond to Financial Incentives ?

  • Guy Laroque

    (Crest)

  • Bernard Salanié

    (Crest)

There has been little empirical work evaluating the sensitivity of fertility to nancial incentives at the household level. We put forward an identi cationstrategy that relies on the fact that variation of wages induces variation inbene ts and tax credits among \comparable" households. We implement thisapproach by estimating a discrete choice model of female participation andfertility, using individual data from the French Labor Force Survey and afairly detailed representation of the French tax-bene t system. Our resultssuggest that nancial incentives play a notable role in determining fertilitydecisions in France, both for the rst and for the third child. As an example,an unconditional child bene t with a direct cost of 0:3% of GDP might raisetotal fertility by about 0:3 point.

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Paper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2008-10.

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Length: 46
Date of creation: 2008
Date of revision:
Handle: RePEc:crs:wpaper:2008-10
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  1. Hidehiko Ichimura & Christopher Taber, 2002. "Semiparametric reduced form estimation of tuition subsidies," CeMMAP working papers CWP01/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  2. Patricia Apps & Ray Rees, 2010. "Fertility, Female Labor Supply and Public Policy," Working Papers id:2754, eSocialSciences.
  3. Timothy Besley & Anne Case, 1994. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," NBER Working Papers 4956, National Bureau of Economic Research, Inc.
  4. Melissa Schettini Kearney, 2002. "Is There an Effect of Incremental Welfare Benefits on Fertility Behavior? A Look at the Family Cap," NBER Working Papers 9093, National Bureau of Economic Research, Inc.
  5. Richard Blundell & Alan Duncan & Costas Meghir, 1998. "Estimating Labor Supply Responses Using Tax Reforms," Econometrica, Econometric Society, vol. 66(4), pages 827-862, July.
  6. Alma Cohen & Rajeev Dehejia & Dmitri Romanov, 2007. "Do Financial Incentives Affect Fertility?," NBER Working Papers 13700, National Bureau of Economic Research, Inc.
  7. David Blau & Philip Robins, 1989. "Fertility, Employment, and Child-Care Costs," Demography, Springer, vol. 26(2), pages 287-299, May.
  8. Del Boca, Daniela, 2002. "The Effect of Child Care and Part Time Opportunities on Participation and Fertility Decisions in Italy," IZA Discussion Papers 427, Institute for the Study of Labor (IZA).
  9. Michael P. Keane & Kenneth I. Wolpin, 2006. "Exploring the Usefulness of a Non-Random Holdout Sample for Model Validation: Welfare Effects on Female Behavior," PIER Working Paper Archive 06-006, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  10. Kevin Milligan, 2002. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," NBER Working Papers 8845, National Bureau of Economic Research, Inc.
  11. 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.
  12. 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 1035-51, December.
  13. 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 1411-41, November.
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