Subsidizing the Stork: New Evidence on Tax Incentives and Fertility

Kevin Milligan

No 8845, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Variation in tax policy presents an opportunity to estimate the responsiveness of fertility to prices. This paper exploits the introduction of a pro-natalist transfer policy in the Canadian province of Quebec that paid up to C$8,000 to families having a child. I implement a quasi-experimental strategy by forming treatment and control groups defined by time, jurisdiction, and family type. This permits a triple-difference estimator to be implemented -- both on the program's introduction and cancellation. Furthermore, the incentive was available broadly, rather than to a narrow subset of the population as studied in the literature on AFDC and fertility. This provides a unique opportunity to investigate heterogeneous responses. I find a strong effect of the policy on fertility, and some evidence of a heterogeneous response that may help reconcile these results with the AFDC literature.

JEL-codes: H3 J1 (search for similar items in EconPapers)
Date: 2002-03
New Economics Papers: this item is included in nep-pbe
Note: CH PE
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Citations: View citations in EconPapers (24)

Published as Kevin Milligan, 2005. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 539-555, 06.

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