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Baby bonus, anyone? Examining heterogeneous responses to a pro-natalist policy

Natalie Malak (), Md Mahbubur Rahman () and Terry Yip
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Natalie Malak: The University of Alabama in Huntsville

Journal of Population Economics, 2019, vol. 32, issue 4, No 4, 1205-1246

Abstract: Abstract We examine the impact of the Allowance for Newborn Children, a universal baby bonus offered by the Canadian province of Quebec, on birth order, sibship sex composition, income, and education. We find a large response for third- and higher-order births for which the bonus was more generous. Interestingly, though, we find stronger response if there were two previous sons or a previous son and daughter rather than two previous daughters. We also find, in addition to a transitory effect, a permanent effect, with the greatest increase in one daughter-two son families among three-child households. Moreover, we find a hump shape response by income group, with the greatest response from middle-income families. Also, women with at least some post-secondary education respond more to the policy than those with less. These findings suggest that properly structured pro-natal policies can successfully increase fertility among different segments of the population while simultaneously diminishing the effect of gender preferences and fertility disparity related to women’s education.

Keywords: Fertility; Baby bonus; Fertility incentive; Sex composition; Difference-in-differences (search for similar items in EconPapers)
JEL-codes: J13 J18 H31 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s00148-019-00731-y

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Handle: RePEc:spr:jopoec:v:32:y:2019:i:4:d:10.1007_s00148-019-00731-y