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The Zero Effect of Income Tax on the Timing of Birth: Some Evidence on French Data

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  • Nicolas Moreau

Abstract

The present paper investigates the correlation between the French tax rebate triggered by the birth of a child and the probability to bring forward childbirth from late December to early January. Using administrative tax data from 2010 to 2016, I precisely simulate the corresponding tax rebate for households in which a child was born from December 24 to January 7. Contrary to prior research, I do not find clear evidence of a significant link between the tax rebate brought about by a supplementary dependent child on the tax return and the probability of a late December birth. Either the amount of the incentive may not be large enough or households may not correctly anticipate the corresponding tax rebate. Nevertheless, a small learning effect is present. According to my results, a significant correlation between the tax rebate and the probability of having a child in December is observed among the wealthiest half of households with at least two children already claimed that also benefit from a relatively large tax rebate. However, this seems to be due to a spurious correlation. Instead, the results could reflect the willingness of parents to avoid childbirth on a public holiday.
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  • Nicolas Moreau, 2021. "The Zero Effect of Income Tax on the Timing of Birth: Some Evidence on French Data," TEPP Working Paper 2021-03, TEPP.
    • Handle: RePEc:tep:teppwp:wp21-03
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