Can Countries Reverse Fertility Decline? Evidence from France's Marriage and Baby Bonuses, 1929–1981
International Tax and Public Finance, Vol. 18(3), p. 253-272, 2011
Posted: 5 Jun 2017
Date Written: 2010
A number of countries have begun implementing tax incentives designed to reverse the decline in fertility. Whether such incentives are effective or equitable remains an open question. During the early twentieth century, France initiated an unusual tax policy to promote fertility and marriage: Household income was divided by family size to obtain a final tax bracket. The policy was regressive in that fertility incentives were so large and greatest among the rich. Similar policies whose fertility benefit increases with income are being implemented today. Using hand-collected archival data from aggregate tax returns and three natural experiments, I find mixed evidence that these kinds of tax incentives affect fertility and marriage.
Keywords: Fertility, Tax Policy, Natural Experiment, Regressive Tax
JEL Classification: J13, J11, H20, H31
Suggested Citation: Suggested Citation