Economics of baby-making
Fri, 2008-01-18 10:37
#1
Economics of baby-making
Fri, 2008-01-18 10:37
#2
I came across a study on economic incentives influencing fertility rates (only the abstract is available for free) via the Freakonomics blog.
quote:
We find a significant positive effect on fertility, with the mean level of child subsidies producing a 7.8 percent increase in fertility. The positive effect of child subsidies on fertility is concentrated in the bottom half of the income distribution. It is present across all religious groups, including the ultra-Orthodox Jewish population whose religious principles forbid birth control and family planning. Using a differences-in-differences specification, we find that a large, unanticipated reduction in child subsidies that occurred in 2003 had a substantial negative impact on fertility. Overall, our results support the view that fertility responds to financial incentives and indicate that the child subsidy policies used in many countries can have a significant influence on incremental fertility decisions.
There does seem to be a negative correlation between affluence and fertility rates. I have wondered at times if this could be due to the fact that rising income levels increase the cost of producing and rearing children, because missed time from work carries a much higher opportunity cost when you have higher earnings. This study seems to support that idea.
Should public policy attempt to counteract this? How so?