Dec 16, 2011

Incentives and the timing of births

In this paper we study the fertility effects, as well as the potential health consequences for both mother and newborn child, following the announcement of the abolition of the Austrian baby bonus as of January 1, 1997. The Austrian baby bonus amounted to a maximum of 1,090 Euros per child in 1996, the year before the abolition, and was paid conditional on medical examinations of both mother and newborn child. The unique feature of this policy change is that the elimination of the benefit was announced about ten months prior to enactment, creating the potential for an “abolition effect” because prospective parents had both an incen- tive and the opportunity to move their baby plans forward. 
. . . we find that about 8% (roughly 600) more babies were born in the month before the abolition, relative to the number of children that would have been expected in the absence of the policy change, as a consequence of the public announcement. 

No comments:

Post a Comment