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

Abstract

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 higherorder 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.

The Early Bird Catches the Worm: The Effect of Birth Order on Old‐Age Mortality

“…Scholars in various fields, including economics, sociology, demography, medical sciences, and psychology, investigate the later-life effects of birth order. Although there is no conclusive consensus in this field, they generally find that later-born children, on average, have adverse later-life health outcomes, intelligence, cognitive development, IQ, education, and earning (Bertoni and Brunello, 2016;Black et al, 2011;Jayachandran and Pande, 2017;Malak et al, 2019;Pfouts, 1980;Spears et al, 2019). 2 In addition, there is also evidence that a child's birth order is associated with risks of neonatal and infant mortality (Cabrera, 2011;Coffey and Spears, 2021;Cohen, 1975;Miller et al, 1992).…”

Causal Analysis of Policy Effects on Fertility

“…This indicates an effect on completed fertility, but some uncertainty remains given an observation period of five years. Malak et al (2019) analyze the same reform in a similar design with data for a longer follow-up period, and find evidence for lasting effects on completed fertility. Parent and Wang (2007) estimate effects of a similar reform in the 1970s.…”

“…Overall, there is quite solid evidence that financial incentives affect fertility. Most studies estimate effects in the short or medium run, but there is also increasing evidence of lasting effects on completed fertility (González & Trommlerová 2023;Malak et al 2019).…”