Subsidizing the Stork: New Evidence on Tax Incentives and Fertility

66 Pages Posted: 23 Mar 2002 Last revised: 26 Oct 2010

See all articles by Kevin S. Milligan

Kevin S. Milligan

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: March 2002

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.

Suggested Citation

Milligan, Kevin S., Subsidizing the Stork: New Evidence on Tax Incentives and Fertility (March 2002). NBER Working Paper No. w8845. Available at SSRN: https://ssrn.com/abstract=305071

Kevin S. Milligan (Contact Author)

University of British Columbia (UBC) - Department of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
36
Abstract Views
857
PlumX Metrics