The Zero Effect of Income Tax on the Timing of Birth: Some Evidence on French Data

Nicolas Moreau

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Abstract: The present paper investigates the correlation between the French tax rebate triggered by the birth of a child and the probability to bring forward childbirth from late December to early January. Using administrative tax data from 2010 to 2016, I precisely simulate the corresponding tax rebate for households in which a child was born from December 24 to January 7. Contrary to prior research, I do not find clear evidence of a significant link between the tax rebate brought about by a supplementary dependent child on the tax return and the probability of a late December birth. Either the amount of the incentive may not be large enough or households may not correctly anticipate the corresponding tax rebate. Nevertheless, a small learning effect is present. According to my results, a significant correlation between the tax rebate and the probability of having a child in December is observed among the wealthiest half of households with at least two children already claimed that also benefit from a relatively large tax rebate. However, this seems to be due to a spurious correlation. Instead, the results could reflect the willingness of parents to avoid childbirth on a public holiday.

Keywords: fertility; income taxation; birth (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-dem, nep-eur and nep-pbe
Note: View the original document on HAL open archive server: https://hal.science/hal-03157256
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Published in International Tax and Public Finance, In press, ⟨10.1007/s10797-022-09733-1⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03157256

DOI: 10.1007/s10797-022-09733-1

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