The Korean Journal of Economic Studies
Effect of Cash Benefit on Marital Fertility: Evidence from the Basic Child Care Allowance in Gangwon Province
Chulhee Lee (, Seoul National University) and So-Young Lee (Korea Institute for Health & Social Affairs)Year 2022Vol. 70No. 2
This study analyzes the effect of cash benefit on marital fertility. The results of county panel fixed model estimation shows that pro-natal cash benefits of local governments significantly increased marital fertility. The Basic Child Care Allowance (BCCA) in Gangwon Province offers a unique opportunity to examine the effect of a large-scale increase in pronatal cash benefit. A decomposition of change in the number of births suggests that marital fertility (especially the probability of having first child among married women with no child) sharply rose after the provision of the BCCA, playing a role of increasing the number of births. The results of difference-in-difference estimations based on county-level data suggest that the BCCA increased the marital fertility rates by 15~20% of the average rate during the sample period.