<p>For example, "Assessing the Impact of the Maternity Capital Policy in Russia" (<a href="https://ideas.repec.org/p/iza/izadps/dp7705.html" rel="nofollow">2014</a>):</p>

<blockquote>
  <p>Starting in 2007, the federal government has pursued an ambitious pro-natalist policy. Women who give birth to at least two children are entitled to "maternity capital" assistance ($11,000). In this paper we estimate a structural dynamic programming model of fertility and labor force participation in order to evaluate the effectiveness of the policy. <strong>We find that the program increased long-run fertility by about 0.15 children per woman.</strong></p>
</blockquote>

<p>Of course, the impact varies by country and incentive. See <a href="https://ideas.repec.org/p/iza/izadps/dp7705.html#references-body" rel="nofollow">references and citations</a> of this paper for more research.</p>

CC BY-SA 3.0
2015-09-28T22:10:28.527Z
Thanks for your answer Anton. I should be clear that I'm talking about safety net welfare payments, not payments designed to encourage people to have children.
dwjohnston
CC BY-SA 3.0
2015-09-28T10:50:47.307Z
2015-09-28T10:50:47.307Z
Anton Tarasenko
<p>I'm not really an expert on the subject, but for welfare reforms I've been suggested to read Grogger and Karoly: "Welfare Reform: Effects of a Decade of Change" (2009) in the past.</p>

<p>I believe it tackles at least some of the subjects you're thinking about and might be a good place to start.</p>

CC BY-SA 3.0
2015-09-28T05:12:01.313Z
2015-09-28T05:12:01.313Z
John L.
<p>A common argument against safety net social welfare for people with children is that it can incentivise people without better options to have children. This could be considered a <a href="http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&amp;objectid=11519734">problem if it means people who aren't fit to be parents continue having children.</a> </p>

<p>For example in New Zealand the the Domestic Purposes Benefit (a benefit paid to people with children, if child support from the other parent does not exceed the base rate) pays about the same rate as a minimum wage full time job. </p>

<p>An argument could be made that the economically rational decision for an uneducated person is to have children, where they can't be fired, aren't subject to starting times or drug tests etc. </p>

<p>Is there any evidence for what the effect of welfare payments for children has? </p>

<p>In particular I'm interested in any situation where the entitlement has either increased or decreased, and what the effects on birthrate or people applying for the benefit has been after that. </p>

CC BY-SA 3.0
2015-09-28T05:26:46.927Z
You could compare Denmark - where you get 13 months of paid maternity leave - to somewhere you none? Can't remember the exact years, but you should be able to find lots of info about Denmark via http://www.danmarksstatistik.dk/en
Thorst
CC BY-SA 3.0
2015-09-28T11:10:37.593Z
@Lasse I don't think cross-country regressions are a valid tool w.r.t. identification.
FooBar
CC BY-SA 3.0
2015-09-28T11:32:43.917Z
Historically, it was an argument *for* family benefits (“generous” is very loaded, there are significant costs to rearing a child in any case, try telling a parent they are freer with their time than an employee!), incentivising having children was the point. But the evidence that it works is not strong, as far as I know. And even it did, empirically, I don't think it would lend much support to your argument, it might also simply be that the benefits allow people to have children they wished but could not otherwise afford.
Relaxed
CC BY-SA 3.0
2015-09-28T22:06:48.233Z
@Relaxed I should be clear that I'm not talking about benefits that are intended to incentivise people to have children (as Anton's answer mentions) - but safety net welfare benefits intended to help the child.
dwjohnston
CC BY-SA 3.0
2015-09-28T22:15:08.567Z
Just a note— this is one of those questions where the wording in the title will be taken by an economist to mean something very different than to a normal person. Of course it would be surprising if, on the margin, per-child welfare payments did not increase fertility. But the average person will take the wording "welfare payments for children incentivise having children" to mean that people will have children purely for the purpose of obtaining the extra welfare payments, which is likely rare unless the payments are extraordinarily large.
dismalscience
CC BY-SA 3.0
2015-09-28T22:17:11.313Z
@dismalscience - The arguement would be lacking other options due to lack of education etc, considering parenting  a career is an economically rational decision.
dwjohnston
CC BY-SA 3.0
2015-09-28T22:31:56.030Z
@dwjohnston — I would note that the cost of a child in NZ for a low-income family is \$150/wk— or \$3.75/hr if someone managed to only spend 40 hours parenting (ask anyone with kids whether this is realistic)— so the payment would have to be well in excess of minimum wage for parenting to be a net-income-maximizing choice when a normal job was available. (http://taxpolicy.ird.govt.nz/publications/2010-dd-supporting-children/appendix-3)
dismalscience
CC BY-SA 3.0
2015-09-29T06:05:58.197Z
@FooBar, probably not, but Norway, Denmark and Sweden are used that way all the time :)
Thorst
CC BY-SA 3.0
2015-09-29T07:34:47.590Z
@dwjohnston Is there a difference? It's money the parents receive if they have children…
Relaxed
CC BY-SA 3.0
2015-09-29T20:34:20.640Z
@Relaxed - There's a difference in intent at least.
dwjohnston
CC BY-SA 3.0
2015-09-29T20:44:13.677Z
@dwjohnston If the measures have the same structure, it's going to be difficult to differentiate them, empirically. Above all, incentives are quantitative effects, not an either/or thing. Beside being ludicrous the idea that poor people consider parenting a career choice and have children only for the money inherently goes way beyond what any data could possibly tell you. As dismalscience explained, it's not what “incentivising” means.
Relaxed
CC BY-SA 3.0
2015-09-29T20:48:08.460Z
So “Does giving money to parents prompt people to have more children on a average?” is a well-defined, tractable question I think. “Do people have children solely because there are benefits intended to help poor children?” less so. I initially took your question to be about the former, which is why I recommended getting rid of the more loaded language. If you are only interested in the latter, then I think the question should simply be closed, it's not a good economics/econometrics question in my opinion.
Relaxed
<taxation><empirical-evidence><population-economics>
Do welfare payments for children incentivise having children?
dwjohnston
# Do welfare payments for children incentivise having children?

(Asked by: username_0 on 2015-09-28)

A common argument against safety net social welfare for people with children is that it can incentivise people without better options to have children. This could be considered a [problem if it means people who aren't fit to be parents continue having children.](http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11519734)

For example in New Zealand the the Domestic Purposes Benefit (a benefit paid to people with children, if child support from the other parent does not exceed the base rate) pays about the same rate as a minimum wage full time job.

An argument could be made that the economically rational decision for an uneducated person is to have children, where they can't be fired, aren't subject to starting times or drug tests etc.

Is there any evidence for what the effect of welfare payments for children has?

In particular I'm interested in any situation where the entitlement has either increased or decreased, and what the effects on birthrate or people applying for the benefit has been after that.

**Tags:** taxation, empirical-evidence, population-economics

> **Comments:**
> **username_1**: You could compare Denmark - where you get 13 months of paid maternity leave - to somewhere you none? Can't remember the exact years, but you should be able to find lots of info about Denmark via http://www.danmarksstatistik.dk/en  
> **username_2**: @Lasse I don't think cross-country regressions are a valid tool w.r.t. identification.  
> **username_3**: Historically, it was an argument *for* family benefits (“generous” is very loaded, there are significant costs to rearing a child in any case, try telling a parent they are freer with their time than an employee!), incentivising having children was the point. But the evidence that it works is not strong, as far as I know. And even it did, empirically, I don't think it would lend much support to your argument, it might also simply be that the benefits allow people to have children they wished but could not otherwise afford.  
> **username_0**: @username_3 I should be clear that I'm not talking about benefits that are intended to incentivise people to have children (as username_5's answer mentions) - but safety net welfare benefits intended to help the child.  
> **username_4**: Just a note— this is one of those questions where the wording in the title will be taken by an economist to mean something very different than to a normal person. Of course it would be surprising if, on the margin, per-child welfare payments did not increase fertility. But the average person will take the wording "welfare payments for children incentivise having children" to mean that people will have children purely for the purpose of obtaining the extra welfare payments, which is likely rare unless the payments are extraordinarily large.  
> **username_0**: @username_4 - The arguement would be lacking other options due to lack of education etc, considering parenting  a career is an economically rational decision.  
> **username_4**: @username_0 — I would note that the cost of a child in NZ for a low-income family is \$150/wk— or \$3.75/hr if someone managed to only spend 40 hours parenting (ask anyone with kids whether this is realistic)— so the payment would have to be well in excess of minimum wage for parenting to be a net-income-maximizing choice when a normal job was available. (http://taxpolicy.ird.govt.nz/publications/2010-dd-supporting-children/appendix-3)  
> **username_1**: @username_2, probably not, but Norway, Denmark and Sweden are used that way all the time :)  
> **username_3**: @username_0 Is there a difference? It's money the parents receive if they have children…  
> **username_0**: @username_3 - There's a difference in intent at least.  
> **username_3**: @username_0 If the measures have the same structure, it's going to be difficult to differentiate them, empirically. Above all, incentives are quantitative effects, not an either/or thing. Beside being ludicrous the idea that poor people consider parenting a career choice and have children only for the money inherently goes way beyond what any data could possibly tell you. As username_4 explained, it's not what “incentivising” means.  
> **username_3**: So “Does giving money to parents prompt people to have more children on a average?” is a well-defined, tractable question I think. “Do people have children solely because there are benefits intended to help poor children?” less so. I initially took your question to be about the former, which is why I recommended getting rid of the more loaded language. If you are only interested in the latter, then I think the question should simply be closed, it's not a good economics/econometrics question in my opinion.  

---

## 2 answers

### Answer by username_5 on 2015-09-28. Score: 4

For example, "Assessing the Impact of the Maternity Capital Policy in Russia" ([2014](https://ideas.repec.org/p/iza/izadps/dp7705.html)):

> Starting in 2007, the federal government has pursued an ambitious pro-natalist policy. Women who give birth to at least two children are entitled to "maternity capital" assistance ($11,000). In this paper we estimate a structural dynamic programming model of fertility and labor force participation in order to evaluate the effectiveness of the policy. **We find that the program increased long-run fertility by about 0.15 children per woman.**

Of course, the impact varies by country and incentive. See [references and citations](https://ideas.repec.org/p/iza/izadps/dp7705.html#references-body) of this paper for more research.

> **Comments:**
> **username_0**: Thanks for your answer username_5. I should be clear that I'm talking about safety net welfare payments, not payments designed to encourage people to have children.  

---

### Answer by username_6 on 2015-09-28. Score: 2

I'm not really an expert on the subject, but for welfare reforms I've been suggested to read Grogger and Karoly: "Welfare Reform: Effects of a Decade of Change" (2009) in the past.

I believe it tackles at least some of the subjects you're thinking about and might be a good place to start.


---

