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The Effects Of Subsidies For Childbearing On Migration And Fertility: Evidence From Korea

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  • SUNG HYO HONG

    (Division of Economics and Trade, Kongju National University, 56 Gongjudaehak-ro Gongju, Chungnam 314-701, Republic of Korea)

  • RYAN SULLIVAN

    (Naval Postgraduate School, 287 Halligan Hall Monterey, California 93943, USA)

Abstract

This study examines the effects of a fertility subsidy that was instituted in specific regions in Korea in 2004. The value of the subsidy ranged from $4000 to $9000 (2004 US$) depending on the area of residence. Using a difference-in-differences estimation strategy, we measure the effects of the policy on childbearing and migration in and out of the subsidized areas. Our estimates for migration suggest that the policy significantly increased the net inflow of females into the subsidized areas. This effect is driven roughly equally by a decrease in the outflow from and an increase into the subsidized areas. Our estimated effects on fertility are in line with previous results from the literature; we find that a $1000 increase in fertility subsidies leads to a 0.108% increase in the chance of bearing a child for all age groups (21 to 45). Our results show that the policy increased total births in 2005 by 11,000 and that the vast majority of this increase was from the 21 to 33 cohort.

Suggested Citation

  • Sung Hyo Hong & Ryan Sullivan, 2016. "The Effects Of Subsidies For Childbearing On Migration And Fertility: Evidence From Korea," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-16, September.
    • Handle: RePEc:wsi:serxxx:v:61:y:2016:i:04:n:s021759081550040x
    DOI: 10.1142/S021759081550040X
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    Cited by:

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    2. Choo, Dahae & Jales, Hugo, 2021. "Childbearing and the distribution of the reservation price of fertility: The case of the Korean baby bonus program," Journal of Asian Economics, Elsevier, vol. 77(C).

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