The Effects of a Universal Child Benefit

Libertad Gonzalez

No 5994, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: I study the impact of a universal child benefit on fertility and family well-being. I exploit the unanticipated introduction of a new, sizeable, unconditional child benefit in Spain in 2007, granted to all mothers giving birth on or after July 1, 2007. The regression discontinuity-type design allows for a credible identification of the causal effects. I find that the benefit did lead to a significant increase in fertility, as intended, part of it coming from an immediate reduction in abortions. On the unintended side, I find that families who received the benefit did not increase their overall expenditure or their consumption of directly child-related goods and services. Instead, eligible mothers stayed out of the labor force significantly longer after giving birth, which in turn led to their children spending less time in formal child care and more time with their mother during their first year of life. I also find that couples who received the benefit were less likely to break up the year after having the child, although this effect was only short-term. Taken together, the results suggest that child benefits of this kind may successfully increase fertility, as well as affecting family well-being through their impact on maternal time at home and family stability.

Keywords: policy evaluation; fertility; regression discontinuity; consumption; labor supply; child benefit (search for similar items in EconPapers)
JEL-codes: D1 H5 J1 J2 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2011-09
New Economics Papers: this item is included in nep-dem and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published - published as 'The Effect of a Universal Child Benefit on Conceptions, Abortions, and Early Maternal Labor Supply' in: American Economic Journal: Economic Policy, 2013, 5 (3), 160-188

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Related works:
Working Paper: The Effects of a Universal Child Benefit (2015)
Working Paper: The effects of a universal child benefit (2011)
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