Fertility, Family Policy, and Labor Supply: Quasi-Experimental Evidence from France

Abstract

This paper examines fertility and labor supply responses to a French policy reform that consisted in conditioning the amount of child allowances on household income. Relying on Regression Discontinuity Design and administrative income data, the paper finds that restricting family allowance eligibility criteria decreases fertility. The results also highlight that receiving half the amount of the allowances or not receiving any leads to an increase in both male and female labor supply. Auxiliary regressions show that at least part of the decline in fertility is due to timing effects, as the fertility impact declines as women's age increases.