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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 Publication2019
AuthorsMalak, N., Rahman M. Mahbubur, and Yip T. A.
JournalJournal of Population Economics
Pages1205 - 1246
Keywordsbaby bonus, difference-in-differences, fertility, fertility incentive, sex composition

We examine the impact of the Allowance for Newborn Children, a universal baby bonus offered by the Canadian province of Quebec, on birth order, sibship sex composition, income, and education. We find 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. We also find, in addition to a transitory effect, a permanent effect, with the greatest increase in one daughter-two son families among three-child households. Moreover, we find a hump shape response by income group, with the greatest response from middle-income families. Also, women with at least some post-secondary education respond more to the policy than those with less. These findings suggest that properly structured pro-natal policies can successfully increase fertility among different segments of the population while simultaneously diminishing the effect of gender preferences and fertility disparity related to women's education.

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