Do childbirth grants increase the fertility rate? Policy impacts in South Korea

Yeon Jeong Son ()
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Yeon Jeong Son: University of Illinois at Chicago

Review of Economics of the Household, 2018, vol. 16, issue 3, No 6, 713-735

Abstract: Abstract In response to a low fertility rate, a number of municipalities in South Korea have been providing family benefits in the form of childbirth grants and child allowances. Using panel data for 230 municipalities that spans the years 2001–2014, this paper examines the impacts of family benefits on the fertility rate in Korea. I use the fact that different municipalities began providing the family benefits at different times to estimate the impact of family benefits on fertility rates using a difference-in-differences approach. This study finds a positive effect of family benefits on total fertility rate. Moreover, it finds little evidence of an anticipatory response within municipalities that adopted the policy. Given that a 10 million Korean won increase in family benefits is associated with a 3.5% increase in the total fertility rate, an increase in family benefits of about 44 million Korean won per child would be required to raise the total fertility rate to a safe zone above 1.5 children per woman, where population declines are gradual and easily reversed.

Keywords: Fertility rate; Family-friendly social policy; Childbirth grants; Family benefits; J08; J22; J23; J80 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11150-017-9383-z

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