Taxes and the Family: The impact of the tax exemption for dependents on marital fertility

In this paper I use data from the Panel Study on Income Dynamics to examine the relationship between the dependent exemption feature of the United States federal income tax (an unambiguous subsidy to dependents) and the fertility behavior of married couples over the period 1979-1983. The exemption decreases the price of a child to a household, thus having a direct relationship to the timing and/or number of children observed in a family. Conditional logit results support this hypothesis by showing that the exemption has a positive and significant impact on the likelihood of having a birth during the period under study.     

Eastern Europe: pronatalist policies and private behavior

Fertility trends in the 9 Eastern European socialist countries (Albania, Bulgaria, Czechoslovakia, German Democratic Republic, Hungary, Poland, Romania, USSR, Yugoslavia) are reviewed. Official policy in all these countries but Yugoslavia is explicitly pronatalist to varying degrees. Attention is directed to the following areas: similarities and differences; fertility trends (historical trends, post World War 2 trends, and family size); abortion trends (abortion legislation history, current legislation, abortion data, impact on birth rates, abortion seekers, health risks, and psychological aftereffects); contraceptive availability and practice; pronatal economic incentives (impact on fertility); women's position; and marriage, divorce, and sexual attitudes. The fact that fertility was generally higher in the Eastern European socialist countries than in Western Europe in the mid-1970s is credited to pronatalist measures undertaken when fertility fell or threatened to fall below replacement level (2.1 births/woman) after abortion was liberalized in all countries but Albania, following the lead of the USSR in 1955. Fertility increased where access to abortion was again restricted (mildly in Bulgaria, Czechoslovakia, and Hungary at various times, and severely in Romania in 1966) and/or economic incentives such as birth grants, paid maternity leave, family and child care allowances, and low interest loans to newlyweds were substantially increased (Bulgaria, Czechoslovakia, Hungary, and Poland to some extent, in the late 1960s and early 1970s, and the German Democratic Republic in 1976). Subsequent declines in Bulgaria, Czechoslovakia, Hungary, and Romania suggest that policy induced increases in fertility are short-lived. Couples respond to abortion restrictions by practicing more efficient contraception or resorting to illegal abortion. It is evident that the region's low birth rate is realized mainly with abortion, for withdrawal remains the primary contraceptive method in all countries but Hungary and the German Democratic Republic. It seems that cash incentives have advanced the timing of 1st and 2nd births without substantially increasing the 3rd births required to keep national fertility above replacement level. Demographic factors alone will most likely keep birth rates low in several Eastern European countries during the 1980s and the 1990s. Due to the low birth rates in the 1960s, there will be fewer women in the prime childbearing ages of 20-29 in at least Poland, Czechoslovakia, Bulgaria, and Hungary. It becomes clear that policy efforts to influence private reproductive behavior can only be moderately successful if the living conditions are such that women are determined not to have more than 1 or 2 children.     

The Pronatalist Undercurrent of the $500-per-Child Tax Credit

A review of studies which find a positive impact of tax structure on American fertility suggests this effect will increase with the tax benefits legislated by the 1997 $500-per-child tax credit. The tax credit also resembles pronatalist family allowances in other developed countries. First, however, the article investigates the intent of the tax credit, showing that key supporters hope it will increase fertility among tax-paying Americans. Lastly, the pronatalist undercurrent of the tax credit suggests that future efforts will push for further increasing the tax benefits of children in order to increase the American birth rate.     

Education,employment, and fertility in Kinshasa and prospects for changes in reproductive behavior

This paper examines fertility behavior of women in Kinshasa, Zaire's capital city with a population of roughly four million. We look at relationships linking women's education, employment, and fertility behavior (children ever born, age at first marriage, contraception, abortion, breastfeeding, and postpartum abstinence), using data from a 1990 survey of reproductive-age women. Other things equal, there are significant differences by educational attainment and by modern sector employment in lifetime fertility and in most of the proximate determinants as well. The results suggest that modern contraception and abortion are alternative fertility control strategies in Kinshasa, with abortion appearing to play an important role in contributing to the observed fertility differentials by education and employment. The dramatic increases that have taken place in women's access to secondary and higher education are likely to reduce fertility in the future, while the effects of Zaire's current economic and political crisis are uncertain. Our findings are consistent with some of the arguments of Caldwell et al. (1992) on a new type of fertility transition in sub-Saharan Africa. If Zaire seeks to lower fertility, policy efforts should be made to soften the impact of economic crisis on school enrollments and enhance opportunities for young women to remain in school, at least well into the secondary level. Policy should also seek to promote more effective marketing and delivery of modern family planning services, so as to induce women to substitute modern contraception for abortion as a means of controlling their fertility.     

Reduction in fertility due to induced abortions: A simulation model

The impact of induced abortion on fertility under Indian conditions is studied in this paper. The model is executed on a computer. First, matrices of birth probabilities specific to age and age at marriage are obtained, with the help of a simulation model, under various assumptions regarding the incidence of induced abortion. Later, making use of these matrices, period fertility measures such as age specific marital fertility rates and crude birth rates are obtained for India for the period 1961-75. One of the findings is that the effect of induced abortion in reducing the birth rate of India will be greater if it is used as a supplement to various family planning methods.     

Legal abortion and fertility in Maryland, 1960–1971

In the brief period between 1967 and 1971 about one-third of the state legislatures passed abortion reform bills, and in states such as Maryland the number of legal abortions soared. Maryland with its good reporting system for legal abortions, as well as its demographic representativeness, appears to offer an ideal "test situation" for assessing the impact on fertility of the new liberalization. Data on live births and reported induced abortions to residents of the state have been compiled and analyzed in an effort to interpret the recent changes in birth rates. Variables examined include maternal age, birth order, race, and legitimacy.Since 1968, Maryland, along with higher than national average abortion ratios, has experienced a rate of decline in fertility greater than that for the nation. In addition, most of the age and parity groups with high abortion ratios show fertility declines greater than those for groups not using abortion as extensively, Nevertheless, because a number of different factors simultaneously influence fertility, it is hazardous to make accurate cause-and-effect statements on the relationship of any single one of these to the observed change.     

A method for calculating rates of induced abortion

Accurate measurement of induced abortion is necessary for understanding the fertility dynamics of a population and for making projections about the future. Changes in abortion rates can amplify or dampen the impact of changes in contraception. This paper presents a methodology for calculating marital induced abortion rates from observed marital fertility and contraceptive prevalence and for modeling the impact of substituting contraception for abortion on future fertility. The methodology is validated against observed abortion complications in three populations, and the impact of substituting contraception for abortion on expected fertility is demonstrated.     

The relationship between apartment living and fertility for blacks,Mexican Americans,and other Americans in Racine,Wisconsin

Recently published data from a sample of Bogotá, Colombia public housing residents show that apartment dwellers, but not house dwellers, reduced their fertility in a tight housing market. We propose that the utilitycost theory of fertility accounts for this finding, and, using this theory, we predict that (a) apartment residents will not decrease their fertility in an open housing market and (b) higher fertility will be associated with larger dwellings. Longitudinal data from a sample of Midwest urban blacks, Mexican Americans, and other Americans support both predictions. The substantive implications are discussed.     

Effects of capital taxation on economies with different demographic changes: short term versus long term

We examine the effect of source-based capital taxation on capital accumulation in countries with endogenous fertility and free international capital mobility. When fertility is constant, a tax cut accelerates domestic capital accumulation through international arbitrage and exerts negative influences on the welfare of a foreign country. In contrast, with endogenous fertility, a tax cut by an economy with a higher tax rate and exporting capital may deter capital accumulation and hence lower the welfare in not only domestic but also foreign economies in the long term, although the tax cut may accelerate domestic capital accumulation in the short term.     

Reducing the excess burden of subsidizing the stork: joint taxation, individual taxation, and family tax splitting

Analyzing a homogenous household setting with endogenous fertility and endogenous labor supply, we demonstrate that moving from joint taxation to individual taxation and adapting child benefits so as to keep fertility constant entails a Pareto improvement. The change is associated with an increase in labor supply and consumption and a reduction of the marginal income tax, while the child benefit may move in either direction. Similarly, a move from joint taxation to some scheme of family tax splitting increases labor supply and welfare.     

Contraception,attitude-practice,and fertility differentials among US Hispanic,African–American and white women

Hispanic fertility (primarily among nationals from Mexico, Central and South America in the US) is higher today than it is in Mexico and the other nations of origin (Frank and Heuveline 2005). It persists into the second and third generations, with only moderate signs of declining to replacement. Meanwhile, the fertility rates of African–Americans, American Indians Cubans, and Puerto Ricans have all declined to replacement, only slightly above the non-Hispanic white population. This study attempts to clarify the question why African–American fertility has declined to replacement, but Hispanic fertility has not. The data used are from Cycle 6 of the National Survey of Family Growth (NSFG) of 2002. Differences in physiological or marital-status factors are found not to explain these fertility differences; however, there are significant differences in the practice of contraception during early childbearing years. Slightly less effective methods if contraception is used, and less recourse to abortion if a pregnancy is undesired, all imply higher fertility for Hispanic women. Underlying contraceptive behaviour are sets of attitudes and motives that favour, permit, or seek childbearing. A much higher percentage of Hispanic than African–American women report that they wanted their last birth and intend to have another in the future. Hispanic women of all socio-economic statuses are considerably more pronatal in their attitudes, particularly with respect to the births of first and second children.     

Adolescent fertility: worldwide concerns

There is growing concern over the adverse health, social, economic, and demographic effects of adolescent fertility. Morbidity and mortality rates ar significantly higher for teenage mothers and their infants, and early initiation of childbearing generally means truncated education, lower future family income, and larger completed family size. Adolescent fertility rates, which largely reflect marriage patterns, range from 4/1000 in Mauritania; in sub-Saharan Africa, virtually all rates are over 100. In most countries, adolescent fertility rates are declining due to rising age at marriage, increased educational and economic opportunities for young women, changes in social customs, increased use of contraception, and access to abortion. However, even if fertility rates were to decline dramatically among adolescent women in developing countries, their sheer numbers imply that their fertility will have a major impact on world population growth in the years ahead. The number of women in the world ages 15-19 years is expected to increase from 245 million in 1985 to over 320 million in the years 2020; 82% of these women live in developing countries. As a result of more and earlier premarital sexual activity, fostered by the lengthening gap between puberty and marriage, diminished parental and social controls, and increasing peer and media pressure to be sexually active, abortion and out-of-wedlock childbearing are increasing among teenagers in many developed and rapidly urbanizing developing countries. Laws and policies regarding sex education in the schools and access to family planning services by adolescents can either inhibit or support efforts to reduce adolescent fertility. Since contraceptive use is often sporadic and ineffective among adolescents, family planning services are crucial. Such programs should aim to reduce adolescents' dependence on abortion through preventive measures and increase awareness of the benefits of delayed sexual activity. Similarly, sex education should seek to provide a basis for intelligent, informed decision making. Programs tailored to reach teenagers in schools, recreational centers, and the workplace have particular potential.     

Evolution of fertility and mortality

Historical and current fertility trends in both Quebec and Canada as a whole are surveyed. While fertility among French Canadians was higher than that in neighboring provinces until the mid-20th century, in 1968 Quebec's crude birthrate was the lowest in Canada, and in 1972 it was 13.8 vs. 15.9 (the national birthrate). This reversal is explained in terms of the demographic transition theory, the declining influence of organized religion, and new opportunities for social mobility for minority groups. The birthrate throughout Canada is also declining. Although recent cohort studies are incomplete because women have not yet finished their reproductive years, it appears that completed family size will be lower than at any time in Canadian history. The period total fertility rate indicates an average family size of 1.8 children in 1976, but it is unclear whether this represents an actual reduction in family size or the postponement of childbearing. The sharpest fertility decline has been among women aged 35-49, but peak fertility rates have shifted from the 20-24 age group to those aged 25-29. Fertility is negatively related to education, and the lowest fertility is found among the intermediate income groups. Since the 1969 lifting of the ban on contraceptive sales and advertising, family planning activities have been stepped up. Also removed was the total ban on abortion. In 1975 there were 14.9 therapeutic abortions per 100 live births, but it has been charged that abortion standards are being applied inequitably from hospital to hospital.     

The Impact of State Abortion Policies on Teen Pregnancy Rates

The availability of abortion provides insurance against unwanted pregnancies since abortion is the only birth control method which allows women to avoid an unwanted birth once they are pregnant. Restrictive state abortion policies, which increase the cost of obtaining an abortion, may increase women’s incentive to alter their pregnancy avoidance behavior, thereby reducing the likelihood of unwanted pregnancies. This study, using state-level data for the years 1982, 1992, and 2000, examines the impact of restrictive state abortion laws on teen pregnancy rates. The empirical results indicate that the price of an abortion, Medicaid funding restrictions, and informed consent laws reduce teen, minor teen and non-minor teen pregnancy rates. The empirical results suggest that these abortion policy restrictions affect the unprotected sexual activity of teens resulting in fewer unwanted teen pregnancies.     

The earned income tax credit and fertility

Government programs designed to provide income safety nets often restrict eligibility to families with children, creating an unintended fertility incentive. This paper considers whether dramatically changing incentives in the earned income tax credit affect fertility rates in the USA. We use birth certificate data spanning the period 1990 to 1999 to test whether expansions in the credit influenced birthrate among targeted families. While economic theory would predict a positive fertility effect of the program for many eligible women, our results indicate that expanding the credit produced only extremely small reductions in higher order fertility among white women.

Fertility, child care outside the home, and pay-as-you-go social security

We examine the long-run effects of the pay-as-you-go (PAYG) social security scheme on fertility and welfare of individuals in an overlapping generations model, assuming that child-care services are available in the market. We show that the impact of a tax increase on fertility depends on the relative magnitudes of the standard intergenerational redistribution effect through the social security system, the (implicit) subsidy effect through tax-exemption of child rearing at home, and the price effect through changes in the relative price of market child care, and that if parental child-rearing time is inelastic, a tax cut could bring about a Pareto-improving allocation.

Japan's fertility: effects of contraception and induced abortion after World War II

This report studies the effects of contraception and abortion on crude birth rate (CBR) and total fertility rate (TFR) in Japan from 1947-1980. The CBR declined from 34.3 in 1947 to 17.3 in 1957, and the TFR from 4.5 to 2.0 in the same period. Both stabilized (CBR in the range of 17.0 to 19.0 and TFR at 2.0 to 2.1) between 1957 and 1973. This dramatic decline in fertility was initiated under the serious socioeconomic difficulties of post-World War II Japan. At the onset of the postwar fertility decline, fertility within marriage was controlled most strongly by induced abortion, and to a lesser extent, lactation and contraception. During the period of stable low fertility (1960-1980) the effect of abortion decreased and the effect of contraception increased. KAP surveys show that in the late 1970's more than 75% of contraceptive users in Japan employed the condom, while condom use in other Asian countries is generally very low. A shift from traditional to modern methods of contraception is unlikely to alter the already low level of fertility in Japan but would have considerable social, medical, and economic impact.     

Effects of public education and social security on fertility

Introducing a fertility decision and child care cost into an overlapping generations model with public education and social security, we examine the effects of these public policies on fertility. We show that an increase in income tax, which finances social security benefits and public investment in education, increases fertility. On the other hand, with a constant tax rate, a change in the allocation from social security benefits to public investment in education decreases fertility and, with a constant social security tax, the effect of education tax on fertility is neutral.      

Endogenous fertility,endogenous lifetime and economic growth: the role of child policies

We examine the effects of child policies on both transitional dynamics and long-term demo-economic outcomes in an overlapping-generations neoclassical growth model à la Chakraborty (J Econ Theory 116(1):119–137, 2004) extended with endogenous fertility under the assumption of weak altruism towards children. The government invests in public health, and an individual’s survival probability at the end of youth depends on health expenditure. We show that multiple development regimes can exist. However, poverty or prosperity does not necessarily depend on the initial conditions, since they are the result of how a child policy is designed. A child tax, for example, can be used effectively to enable those economies that were entrapped in poverty to prosper. There is also a long-term welfare-maximising level of the child tax. We show that a child tax can be used to increase capital accumulation, escape from poverty and maximise long-term welfare also when (a) a public pay-as-you-go pension system is in place and (b) the government issues an amount of public debt. Interestingly, there also exists a couple child tax–health tax that can be used to find the second-best optimum optimorum. In addition, we show that results are robust to the inclusion of decisions regarding the child quantity–quality trade-off under the assumption of impure altruism. In particular, there exists a threshold value of the child tax below (resp. above) which child quality spending is unaffordable (resp. affordable) and different scenarios are in existence.     

Urbanization,non-familial work,education, and fertility in Taiwan

It is well known, that there is a relationship between the level of development of a society and its level offertility.¹ However, it is not clear which of the complex ofvariables associated with development are primarily associated with the reduction of fertility. Urbanization, female labour force participation and education are three of the variables most commonly cited as bearing a causal relationship to fertility. Urbanization implies a change of environment of a substantial portion of the population which may result in a change in the value placed on large families. This is particularly true when urban mortality is lower than rural, so that more children survive.² However, it has also been argued that urbanization results in a change in family structure from the extended to the nuclear family with a concomitant reduction in the value placed on having many children.³ Additional changes in family patterns which are sometimes said to explain fertility reduction due to urbanization are increases in the proportion of women never marrying and increases in the age at marriage.