CEU Electronic Theses and Dissertations, 2017
| Author | Szabó, Bence |
|---|---|
| Title | Fertility Effects of the Family Tax Break Extension in Hungary |
| Summary | This thesis examines the short-run effects of the 2011 family tax break extension on fertility outcomes in Hungary, which introduced large-scale tax base deductions for families with children. I identify causal effects by exploiting exogenous variation in the tax break from two sources: the number of children due to the structure of the policy, and the level of family income due to the condition of non-negative taxes, which constrains lower income families from claiming the full amount of the deductions. I construct an aggregate panel dataset of family types grouped by the demographics of the parents, geography and birth order of the child for years 2008-2013, with cells containing the number of births dated back to conception, average family incomes, personal income taxes and family tax breaks. I estimate the fertility effects of the policy in a quasi-experimental design and find that the average increase in the tax break increment for an additional child led to an around 2% increase in the number of births. The effects are heterogeneous across subgroups; the results are mostly driven by third-born children, the highest income quartile and mothers with tertiary education. The results are corroborated by several specifications and other robustness checks. Depending on the specification, around 6,000 to 18,000 additional newborns were conceived in total between 2011 and 2013 due to the policy change. |
| Supervisor | Kézdi, Gábor |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2017/szabo_bence.pdf |
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