Can a cash transfer to families change fertility timing?

Synøve N. Andersen, Statistics Norway
Nina Drange, Statistics Norway

This paper assesses the relationship between cash transfers to families and fertility timing. We make use of a cash-for-care (CFC) policy introduced in Norway in 1998/1999, which entitled all parents of one- and two-year old children to a monthly payment if their child did not use publicly subsidized child care. Although not introduced as a pro-natalist policy, this CFC benefit did indeed reduce the costs of childbearing. We use Norwegian registry data to explore whether being eligible for the CFC benefit change the likelihood of having another child before the eligible child is four years old. Our comparison group consists of mothers giving birth in the period before the benefit was introduced. Preliminary results indicate a negative and rather substantial effect on having a new birth in the four year period, which differs somewhat between different groups of mothers.