Family benefits and fertility: An econometric analysis

This paper addresses the question of whether higher governmental support for families has a positive effect on fertility by encouraging parents to have more children. The analysis is based on data for 22 industrialized countries and covers the period 1970 to 1990. Data are analysed using a fixed-effect econometric model with the sum of age-specific fertility rates as the dependent variable. The results show that family allowances have a positive and significant effect on fertility, while maternity leave benefits have no significant effect. Increasing the value of family allowances by 25 per cent would result in an 0.6 per cent increase in fertility level in the short run. In the long run this effect would be of the order of 4 per cent, or about 0.07 children per woman on average.