 Income effects and labour supply: Evidence from a child benefits reformMathias Fjællegaard Jensen and Jack Blundell Journal of Public Economics, 2024, vol. 230, issue C Abstract: In this paper, we exploit a unique and unexpected reform to the child benefit system in Denmark to assess the effects of child benefits on parental labour supply. A cap on child benefit payments in 2011 led to a non-negligible reduction in child benefits for larger families with young children while leaving child benefits for smaller families unchanged. The differential impact of this policy represents an opportunity to assess the causal impact of child benefit programmes on the labour supply of mothers and fathers. Using a difference-in-differences strategy, we find that the reduction in benefits leads to a substantial increase in the labour supply of mothers. Mothers respond to the policy at both the intensive and extensive margins, with the latter outweighing the former, and the effect persists after controlling for fertility-related family characteristics. To fix preferences for additional children across treatment and control groups, we use data on parents’ medical consultations on sterilisation, a common procedure in Denmark. Keywords: Labour supply; Gender differences; Child benefits (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:230:y:2024:i:c:s0047272723002311 DOI: 10.1016/j.jpubeco.2023.105049 Access Statistics for this article Journal of Public Economics is currently edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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