The Effect of a Child Subsidy on Short-term and Long-term Fertility and its Relationship to the Housing Market

63 Pages Posted: 10 Jul 2019 Last revised: 2 Nov 2022

See all articles by Evgeny Yakovlev

Evgeny Yakovlev

New Economic School; SciencesPo - Sciences Po - Department of Economics; IZA

Ilia Sorvachev

affiliation not provided to SSRN

Date Written: July 8, 2019

Abstract

We evaluate the effects of a series of subsidies, called Maternity Capital, aimed at increasing fertility in Russia. Maternity Capital led to a significant increase in fertility, in both the short and the long run, and has already led to a rise in completed fertility for a large cohort of Russian women. We show that fertility increased more in locations with higher housing scarcity: in locations in the top decile by housing scarcity, fertility growth is twice as high compared to areas from the bottom decile. These results point out that the effectiveness of policy depends essentially on differences in the local costs of raising children. We also find that the program exerts substantial general equilibrium effects: it affects family stability, the educational sector, and the housing market. The program is costly: the estimates imply that an additional birth costs the government approximately US$50,000 in child subsidies.

Keywords: Fertility, Housing, Child subsidy, Pronatalist policies, Maternity Capital

JEL Classification: J13, H1, J08, H5

Suggested Citation

Yakovlev, Evgeny and Sorvachev, Ilia, The Effect of a Child Subsidy on Short-term and Long-term Fertility and its Relationship to the Housing Market (July 8, 2019). Available at SSRN: https://ssrn.com/abstract=3416509 or http://dx.doi.org/10.2139/ssrn.3416509

Evgeny Yakovlev (Contact Author)

New Economic School ( email )

Skolkovskoe shosse 45
Moscow, 121343
Russia

SciencesPo - Sciences Po - Department of Economics ( email )

28, rue des Saints-Pères
Paris, Paris 75007
France

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Ilia Sorvachev

affiliation not provided to SSRN

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