Volume 29, Number 1 (Winter) 1994
Zhang, Junsen, Jason Quan, and Peter Van Meerbergen. 1994. "The Effect of Tax-Transfer Policies on Fertility in Canada, 1921-88." Journal of Human Resources 29(1):181-201.
This paper estimates the effect on fertility of the personal tax exemption for children, child tax credit, family allowances, and maternity leave benefits in Canada using time-series data from 1921 to 1988. It is found that the exemption, child tax credit , and family allowances all have significant and positive effects on fertility; the results are robust to a variety of specifications including first-differencing. While the three tax-transfer programs seem to be very distinct, the null hypothesis that they have no differential effects on fertility can hardly be rejected. All the results also hold for the cumulative effect of the three tax-transfer programs. The estimates predict that a large increase in the value of the tax-transfer programs would be needed to increase fertility to the replacement level.
Junsen Zhang was an assistant professor of economics at the University of Western Ontario when the research for the article was conducted; he is currently a lecturer of economics at the Chinese University of Hong Kong. Jason Quan and Peter Van Meerbergen were both honors students of economics at the University of Western Ontario. They are grateful to Kim Balls, Roderic Beaujot, Robin Carter, James Davies, Lonnie Magee, Robert Moffitt, John Whalley, Leslie Whittington, and seminar participants at the University of Western Ontario and York University for many helpful comments. In particular, they would like to thank three anonymous referees for helpful comments. The first author gratefully acknowledges financial support from the Social Sciences and Humanities Research Council of Canada and the University of Western Ontario Vice-President Research Competition. The data used in this article can be obtained beginning in September 1994 through September 1997 from Junsen Zhang at: Department of Economics, the Chinese University of Hong Kong, Shatin, NT, Hong Kong.
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