Taxes and the Timing of Births
Posted: 19 Jan 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, J13
Suggested Citation: Suggested Citation