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Economic incentives and the timing of births: Evidence from the German parental benefit reform 2007
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.ORCID iD: 0000-0001-8826-0410
Free University of Bozen/Bolzano, Italy.
2009 (English)Report (Other academic)
Abstract [en]

Economic theory suggests that incentives matter for people’s decisions. This paper investigates whether this also holds for less self-evident areas of lifesuch as the timing of births. We make use of a natural experiment when the German government changed its parental benefit system January 1, 2007. The policy change strongly increased economic incentives for women to postpone delivery to the new year provided that they were employed. The incentives for women not employed were not the same, they could gain slightly from giving birth before the policy change. Applying a difference-in-difference-in-difference approach, we find very strong evidence that women with an employment history near to the end of their term indeed succeeded to shift births and became subject to the new and more generous parental benefit system. We estimate the quantitative impact to correspond to a 5–6 percentage points increased probability to give birth the first seven days of 2007 rather than the last seven days of 2006 for employed women.

Place, publisher, year, edition, pages
Uppsala: Department of Economics, Uppsala University , 2009. , 20 p.
, Working Paper Series, Uppsala Center for Fiscal Studies, Department of Economics, Uppsala University, 2009:10
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URN: urn:nbn:se:uu:diva-108733OAI: oai:DiVA.org:uu-108733DiVA: diva2:240562
Available from: 2009-09-28 Created: 2009-09-28 Last updated: 2013-07-09

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