Wednesday, December 20, 2006

Tax and Fertility

Interesting working paper, The Earned Income Tax Credit and Fertility by Reagan Baughman and Stacy Dickert-Conlin. Below is the abstract;

“Government programs designed to provide income safety nets or to encourage work often restrict eligibility to families with children, in an attempt to keep the programs well targeted. One potentially unintended consequence of the design of these programs is that if they lower the costs associated with having children, economic theory suggests that they may encourage childbearing. This paper considers whether dramatically changing incentives in the Earned Income Tax Credit (EITC) affect fertility rates in the United States. We use birth certificate data spanning the period 1990 to 1999 to test whether expansions in the credit influenced birthrate among targeted families. While economic theory would predict that a positive fertility effect of the program for many eligible women, our baseline models show that expanding the credit produced only extremely small reductions in higher-order fertility among white women. We also find evidence that suggests changes in marriage patterns may be related to changing fertility rates. For example, higher levels of the EITC are associated with higher first birth rates among married women and lower first births among unmarried women. This may suggest that the EITC encouraged marriage among single women.”

To-Do List: Wrap Gifts. Have Baby
More on the Effects of Timed Births
"The two economists I mentioned in this week's column – Amitabh Chandra and Stacy Dickert-Conlin – have also looked at the health effects of scheduled births. On this research, they collaborated with Dr. David C. Goodman of Dartmouth Medical School and Laurence Baker, an economist at Stanford.

The researchers compared infant mortality for babies born during the week – when nearly all induced births and scheduled Caesarean sections take place – and on weekends. They took account of a wide variety of factors, including a mother's age, marital status, cigarette and alcohol use, as well whether she received prenatal care and whether she had a number of medical conditions, including diabetes and anemia. They also took into account whether the baby had been born with a congenital anomaly.

When all else was equal, babies born on a weekday died at a noticeably higher rate. The effect was most pronounced among babies weighing between 2 and 3 kilograms (or between 4.4 and 6.6 pounds).

(via Mankiw)

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