Policy and Fertility, a Case Study of the Quebec Parental Insurance Plan

Abstract

In 2006, the Quebec government implemented a parental leave program more generous than the scheme available through the Canadian federal Employment Insurance (EI) program. It was aimed at maintaining the personal disposable income after a birth, especially for women whose income exceeds the maximum insurable earnings of EI. In this article, we assess whether the implementation of the Quebec Parental Insurance Plan (QPIP) was associated with an increase in the fertility in Quebec, especially for highly educated women. We use data from the rotating panels of the Canadian Labor Force Survey. We test the effect of the implementation of the QPIP on fertility by comparing Quebec and Ontario, which kept the federal EI scheme, before and after the implementation of the QPIP. We adapt the difference in differences method (DiD) to the modeling of the fertility schedule using Poisson regression. We estimate fertility by educational levels within each of the four groups of the DiD design by integrating the estimated fertility schedules. Our results show that the implementation of the QPIP was associated with an increase in fertility in Quebec. The magnitude of the increase varies by educational levels: 17% for women who did not complete secondary education, 46% for those who completed it, and 27% for women who earned a university diploma.