Volume 38 - Article 33 | Pages 897–928  

Can a cash transfer to families change fertility behaviour?

By Synøve N. Andersen, Nina Drange, Trude Lappegård

Abstract

Objective: This paper assesses the much-disputed relationship between family policy and fertility, and cash transfers and fertility in particular.

Methods: We take advantage of a cash-for-care (CFC) policy introduced in Norway in 1998, and compare the subsequent fertility behaviour of eligible and ineligible mothers over a four-year period. We estimate linear models assessing both the occurrence and timing of second births, relying on a rich set of covariates and a sensitivity analysis to ensure the robustness of our results.

Results: Contrary to theoretical expectations, the results show that CFC-eligible mothers had a slower progression to second births and lower short-term fertility. The patterns differ between different groups of mothers, and the decline in subsequent childbearing is only statistically significant among mothers with upper secondary (but not higher) education and part-time or full-time employment. We find no increase in short-term fertility in any group of mothers, and suggest that this pattern may be driven by an interaction between the CFC benefit and the already established Norwegian parental leave scheme.

Contribution: The paper demonstrates how policy changes may indeed be associated with changes in fertility behaviour, and that this association may run in theoretically unexpected directions when a given policy is implemented in a wider policy framework. Moreover, it demonstrates how eligible parents may differ in their response to policies depending on the policy’s income effect and the parents’ opportunity costs of childbearing.

Author’s Affiliation

• Synøve N. Andersen - Statistisk sentralbyrå (Statistics Norway), Norway EMAIL
• Nina Drange - Statistisk sentralbyrå (Statistics Norway), Norway EMAIL
• Trude Lappegård - Universitetet i Oslo, Norway EMAIL

Other articles by the same author/authors in Demographic Research

Parental leave policies and continued childbearing in Iceland, Norway, and Sweden
Volume 40 - Article 51

Unemployment and fertility: The relationship between individual and aggregated unemployment and fertility during 1994–2014 in Norway
Volume 46 - Article 35

Introduction to the Special Collection on Finding Work-Life Balance: History, Determinants, and Consequences of New Bread-Winning Models in the Industrialized World
Volume 37 - Article 26

The link between parenthood and partnership in contemporary Norway - Findings from focus group research
Volume 32 - Article 9

Towards a new understanding of cohabitation: Insights from focus group research across Europe and Australia
Volume 31 - Article 34

Cohort fertility patterns in the Nordic countries
Volume 20 - Article 14

New fertility trends in Norway
Volume 2 - Article 3

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