The Effects of Cash Transfer Fertility Incentives and Parental Leave Benefits on Fertility and Labor Supply: Evidence from Two Natural Experiments

The Effects of Cash Transfer Fertility Incentives and Parental Leave Benefits on Fertility and Labor Supply: Evidence from Two Natural Experiments

The Effects of Cash Transfer Fertility Incentives and Parental Leave Benefits on Fertility and Labor Supply: Evidence from Two Natural Experiments

The Effects of Cash Transfer Fertility Incentives and Parental Leave Benefits on Fertility and Labor Supply: Evidence from Two Natural Experimentss

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Référence bibliographique [17686]

Journal of Family and Economic Issues, vol. 36, no 2, p. 263-288.

Fiche synthèse

1. Objectifs


Intentions :
L’étude porte sur les impacts de l’implantation du Régime québécois d’assurance parentale sur la disponibilité de main d’œuvre et sur le taux de natalité dans la province.

Questions/Hypothèses :
«The implementation of these programs raises three intuitive questions: 1. To what extent do fertility incentives increase the birth rate? 2. What are the effects of fertility incentives on labor supply? 3. Net of labor supply, what is the cost per additional birth generated by fertility incentives?» (p. 263-264)

2. Méthode


Échantillon/Matériau :
Les données sont issues de plusieurs études réalisées par Statistique Canada.

Instruments :
Questionnaire

Type de traitement des données :
Analyse statistique

3. Résumé


«This paper has added to the evidence that pronatalist policies have distortionary effects on labor markets, and it is therefore fiscally prudent to take labor supply effects into account when designing fertility incentives by evaluating the cash-transfer fertility incentives that were introduced in Quebec in the late 1980s and 1990s and the QPIP [Quebec Parental Insurance Program] that was introduced in 2006. I demonstrated that cash-transfer fertility incentives have minor impacts on fertility but, consistent with theory, reduce the labor supply of mothers of young children. In contrast, increasing the generosity of parental leave benefits increases the birth rate substantially and also induces increases in the labor supply of women of childbearing age. The effects of both sets of programs are heterogeneous by the parity of the child: the increase in births due to cash transfers was driven primarily by first births whereas 68% of the increase in births attributable to QPIP were of second or higher parity. When designing fertility incentives, policymakers should take into account how they may affect the quantum of fertility. For example, if they believe that larger families are more desirable due to returns to scale within families, then they should favor parental leave benefits.» (p. 286)