Family benefits and fertility: an econometric analysis.
Current low fertility levels and recent and ongoing changes at the family level have led the governments of most industrialized countries to be more supportive of families. That support comes in the form of policies designed and implemented to improve families' standards of living through either financial assistance or by allowing parents to more easily combine employment and family responsibilities. Family benefits reduce the cost of having children. As such, one could assume that higher benefits lead to higher fertility. The authors therefore explore whether this bolstered governmental support for families has a positive effect upon fertility by encouraging parents to have more children. Findings are based upon an analysis, using an econometric model, of differences and similarities across countries in the levels of governmental support for families in 22 industrialized countries during 1970-90. It was determined that a 25% increase in family allowances would result in a fertility level which is about 0.6% higher than usual over the short term and 4% higher over the long term; a positive effect of about 0.07 children/woman on average. The authors consider opinions expressed by the public and governmental officials upon the pronatalist effect of policies, as well as the economic theory of fertility.