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Baby Bonus, anyone? Examining heterogeneous responses to a pro-natalist policy

TitleBaby Bonus, anyone? Examining heterogeneous responses to a pro-natalist policy
Year of Publication2016
AuthorsMalak, N., Rahman M. Mahbubur, and Yip T.
JournalSSRN e-Journal
Date PublishedOctober
Keywordsfamily policy, fertility, reform

We examine the impact of a universal baby bonus on different income, education, and birth order groups. Specifically, we investigate the Allowance for Newborn Children (ANC) offered by the Canadian province of Quebec. With completed fertility rates we establish a permanent, as well as transitory, effect on fertility. Moreover, we find a hump shape response by income group, with the greatest response from middle-income families. Women with at least some post-secondary education respond more to the policy than those with less. We find also a large response for third and higher-order births for which the bonus was more generous. Interestingly, though, we find stronger response if there were two previous sons or a previous son and daughter rather than two previous daughters. These findings suggest that pro-natal policies can successfully increase fertility and be cost-effectively structured by targeting households with specific characteristics.

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