Does Fertility Respond to Financial Incentives ?
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.
|Date of creation:||2008|
|Date of revision:|
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