Many countries use redistributional measures directed towards families, with some variation in the structure of packages and the level of benefits. These measures may have an impact on fertility. The study looks at whether there is empirical evidence regarding the impact of policy measures on fertility, and if the strength of the impact can be quantified. The focus of the analysis lies on Germany, France, Sweden and the United Kingdom.
The study is based on a literature survey on research regarding the fertility effects of child benefits in the countries covered. The survey is augmented by a comparison of institutional features of family policies and relevant data on fertility trends in these countries.
Monetary child benefits of all kinds have been shown to have a significant impact on fertility in numerous studies. In contrast, it has not been possible to demonstrate in a convincing fashion that the local availability of institutional child care services has a positive effect on the birth rate. In many cases the impact of child benefits on fertility is moderate in size. For example, additional family benefits amounting to about one per cent of GDP in size contribute to an increase in birth rates in the order of 0.2 children per woman. The price elasticity of demand for children has been estimated in a recent study to be about -0.2. Given a monthly cost of a child of 310 Euro, an additional child benefit of 31 Euro per month that reduces the price of a child by 10 % would increase the fertility rate by 2.2 per cent, which corresponds to about 0.03 children.
Volker Meier, Auswirkungen familienpolitischer Instrumente auf die Fertilität: Internationaler Vergleich für ausgewählte Länder, ifo Forschungsbericht No. 26, ifo Institut für Wirtschaftsforschung: Munich 2005.
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