Fertility and the Personal Exemption: Comment
24 Pages Posted: 17 May 2010 Last revised: 5 Sep 2010
Date Written: May 2010
One of the most commonly cited studies on the effect of child subsidies on fertility, Whittington, Alm and Peters (1990), claimed a large positive effect of child tax benefits on fertility using time series methods. We revisit this question in light of recent increases in child tax benefits by replicating this earlier study and extending the analysis. We do not find strong evidence to justify the model specification from the original paper. Moreover, even if the original specfication is appropriate, we show that the Whittington et al. results are not robust to more general measures of child tax benefits. While we do not find evidence that child tax benefits affect the level of fertility, we find some evidence of a short-run fertility response that occurs with a two-year lag.
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