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Short- and Long-Run Effects of a Sizable Child Subsidy: Evidence from Russia

Author

Listed:
  • Sorvachev, Ilia

    (University of Wisconsin-Madison)

  • Yakovlev, Evgeny

    (New Economic School, Moscow)

Abstract

This paper utilizes a large-scale natural experiment aimed at increasing fertility in Russia. Motivated by a decade-long decrease in fertility and population, the Russian government introduced a sequence of sizable child subsidies (called Maternity Capitals) in 2007 and 2012. We find that the Maternity Capital resulted in a significant increase in fertility both in the short run and in the long run, and has already resulted in an increase in completed fertility for a large cohort of Russian women. The subsidy is conditional and can be used mainly to buy housing. We find that fertility grew faster in regions with a shortage of housing and with a higher ratio of subsidy to housing prices. We also find that the subsidy has a substantial general equilibrium effect. It affected the housing market and family stability. Finally, we show that this government intervention comes at a substantial cost: the government's willingness to pay for an additional birth induced by the program equals approximately 50,000 dollars.

Suggested Citation

  • Sorvachev, Ilia & Yakovlev, Evgeny, 2020. "Short- and Long-Run Effects of a Sizable Child Subsidy: Evidence from Russia," IZA Discussion Papers 13019, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13019
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    References listed on IDEAS

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    Cited by:

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    2. Wookun Kim, 2023. "Baby Bonus, Fertility, and Missing Women," Departmental Working Papers 2308, Southern Methodist University, Department of Economics.
    3. Ekaterina Aleksandrova & Venera Bagranova & Christopher J Gerry, 2021. "The effect of health shocks on labour market outcomes in Russia [Ageing and unused capacity in Europe: is there an early retirement trap?]," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 45(6), pages 1319-1336.
    4. Lara Lebedinski & Cristiano Perugini & Marko Vladisavljević, 2023. "Child penalty in Russia: evidence from an event study," Review of Economics of the Household, Springer, vol. 21(1), pages 173-215, March.
    5. Wookun Kim, 2024. "Baby Bonus, Fertility, and Missing Women," CESifo Working Paper Series 11215, CESifo.
    6. Simola, Heli, 2021. "Long-term challenges to Russian economic policy," BOFIT Policy Briefs 11/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    7. Wookun Kim, 2020. "Baby Bonus, Fertility, and Missing Women," Departmental Working Papers 2011, Southern Methodist University, Department of Economics.
    8. Claudia Hupkau & Jenifer Ruiz-Valenzuela, 2022. "Work and children in Spain: challenges and opportunities for equality between men and women," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 13(1), pages 243-268, May.

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    More about this item

    Keywords

    housing; maternity capital; fertility;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • H1 - Public Economics - - Structure and Scope of Government
    • I1 - Health, Education, and Welfare - - Health

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