The effect of family welfare support on the likelihood of having another child and parents’ labor supply

Stefani Milovanska-Farrington

Research in Economics, 2019, vol. 73, issue 3, 243-263

Abstract: Governments have recently attempted to reverse the below-replacement fertility rates in Europe by reducing child-rearing costs through child benefits, grants and paid leaves. This article examines the causal effect of family allowances on the likelihood of having another child, and on the extensive and intensive margins of labor supply. Evidence from Switzerland suggests that higher child benefits incentivize parents to have more children but do not affect their employment choice. The effect is larger for low-income families. These findings imply that policies aimed at improving the economic well-being of families are likely to increase fertility rates without distorting labor market outcomes.

Keywords: Allowance; Fertility; Employment; Endogeneity; Instrument; DD (search for similar items in EconPapers)
JEL-codes: C26 D84 H24 H53 I38 J01 J13 J18 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:73:y:2019:i:3:p:243-263

DOI: 10.1016/j.rie.2019.07.005

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