Short- and Long-Run Effects of a Sizable Child Subsidy: Evidence from Russia

Ilia Sorvachev and Evgeny Yakovlev
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Ilia Sorvachev: University of Wisconsin-Madison

No 13019, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper utilizes a large-scale natural experiment aimed at increasing fertility in Russia. Motivated by a decade-long decrease in fertility and population, the Russian government introduced a sequence of sizable child subsidies (called Maternity Capitals) in 2007 and 2012. We find that the Maternity Capital resulted in a significant increase in fertility both in the short run and in the long run, and has already resulted in an increase in completed fertility for a large cohort of Russian women. The subsidy is conditional and can be used mainly to buy housing. We find that fertility grew faster in regions with a shortage of housing and with a higher ratio of subsidy to housing prices. We also find that the subsidy has a substantial general equilibrium effect. It affected the housing market and family stability. Finally, we show that this government intervention comes at a substantial cost: the government's willingness to pay for an additional birth induced by the program equals approximately 50,000 dollars.

Keywords: housing; maternity capital; fertility (search for similar items in EconPapers)
JEL-codes: H1 I1 J1 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2020-02
New Economics Papers: this item is included in nep-cis and nep-tra
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Citations: View citations in EconPapers (9)

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