Taxes and the Timing of Births
Syracuse University - Center for Policy Research
Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)
Journal of Political Economy, Vol. 107, No. 1, February 1999
Because the tax savings of having a child are realized only if the birth takes place before midnight, January 1, the incentives for the "marginal" birth are substantial. Using a sample of children from the National Longitudinal Survey of Youth, we find that the probability that a child is born in the last week of December, rather than the first week of January, is positively correlated with tax benefits. We estimate that increasing the tax benefit of having a child by $500 raises the probability of having the child in the last week of December by 26.9 percent.
JEL Classification: H29, J13Accepted Paper Series
Date posted: January 19, 1999
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