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ECON 426 Lecture Notes - Literature Review, Cohort Analysis

Economics (Arts)
Course Code
ECON 426
Sonya Laszlo

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Daniel Goh (McGill ID: 260305028)
ECON 426, Article Summary
28 September 2011
Title: Subsidizing the Stork: New Evidence on Tax Incentives and Fertility
Authors: Kevin Milligan
Source: The Review of Economics and Statistics
Date: August 2005
Keywords: Fertility incentives, fiscal policy
Main hypotheses/questions:
Do fiscal policies affect fertility rate?
Does the magnitude of incentives affect fertility rate?
Main results:
The fertility rate in Quebec increased significantly, to levels comparable to the
rest of Canada, after implementation of the Allowance for Newborn Children
(ANC) policy, but decreased once the policy was cancelled.
The increases in birth of third or higher parity increased during the ANC policy,
most likely due to higher incentives.
Literature review:
Many cited articles examine the view of fiscal incentives on fertility (for example,
Duclos, Lefebvre, and Merrigan (2001).
Also cited articles that presented different results in order to explain differences in
their findings (Rosenzweig (1999), Fairlie and London (1997), Acs (1996)).
Frontier: Effectiveness of fiscal policies that promote higher fertility rate.
Data: Uses vital statistics from the Canadian Census.
More detailed hypotheses/facts/results/comments:
Further data on completed fertility is required to determine whether the fertility
effects are transitory or permanent.
The increased effect of the ANC policy on third or higher order birth is due to
higher dollar value of these births.
There are heterogeneous responses with respect to the effect of the ANC.
Empirical Strategy:
Trends were graphed and fertility rates of Quebec were compared with the rest of
Cohort analysis was utilized to examine whether the increased fertility rate due to
the ANC was permanent, inducing a transitory upward shift.
Used regression and “triple differences estimator” analysis to analyze the impact
of incentives on the fertility rate in Quebec.
Compares data with findings from other studies to explain differences in results.
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