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Economic Incentives and the Timing of Births: Evidence from the German Parental Benefit Reform of 2007

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  • Neugart, Michael
  • Ohlsson, Henry

Abstract

Economic theory suggests that incentives matter for people’s decisions. This paper investigates whether this also holds for less self-evident areas of life such as the timing of births. We use a natural experiment when the German government changed its parental benefit system on January 1, 2007. The policy change strongly increased economic incentives for women to postpone delivery provided that they were employed. Applying a difference-in-difference-in-difference approach, we find very strong evidence that women with an employment history near to the end of their term indeed succeeded to shift births to the New Year and, therefore, could benefit from the new and more generous parental benefit system. Suggesting a model of chain reactions, we also report evidence that some women with due dates earlier in December tried but did not succeed to shift births to the New Year. Copyright Springer-Verlag 2013
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Neugart, Michael & Ohlsson, Henry, 2012. "Economic Incentives and the Timing of Births: Evidence from the German Parental Benefit Reform of 2007," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 59629, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:59629
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/59629/
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    File URL: http://link.springer.com/article/10.1007%2Fs00148-012-0420-1
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    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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