Papers
Topics
Authors
Recent
Gemini 2.5 Flash
Gemini 2.5 Flash
134 tokens/sec
GPT-4o
10 tokens/sec
Gemini 2.5 Pro Pro
47 tokens/sec
o3 Pro
4 tokens/sec
GPT-4.1 Pro
38 tokens/sec
DeepSeek R1 via Azure Pro
28 tokens/sec
2000 character limit reached

The Effect of Financial Resources on Fertility: Evidence from Administrative Data on Lottery Winners (2212.06223v2)

Published 12 Dec 2022 in econ.GN and q-fin.EC

Abstract: This paper utilizes wealth shocks from winning lottery prizes to examine the causal effect of financial resources on fertility. We employ extensive panels of administrative data encompassing over 0.4 million lottery winners in Taiwan and implement a triple-differences design. Our analyses reveal that a substantial lottery win can significantly increase fertility, the implied wealth elasticity of which is around 0.06. Moreover, the primary channel through which fertility increases is by prompting first births among previously childless individuals. Finally, our analysis reveals that approximately 25% of the total fertility effect stems from increased marriage rates following a lottery win.

Definition Search Book Streamline Icon: https://streamlinehq.com
References (89)
  1. Aassve, Arnstein, Simon Burgess, Carol Propper, and Matt Dickson. 2006. “Employment, family union and childbearing decisions in Great Britain.” Journal of the Royal Statistical Society: Series A (Statistics in Society), 169(4): 781–804.
  2. Ager, Philipp, and Benedikt Herz. 2020. “Structural change and the fertility transition.” Review of Economics and Statistics, 102(4): 806–822.
  3. Ahn, Namkee, and Pedro Mira. 2002. “A note on the changing relationship between fertility and female employment rates in developed countries.” Journal of Population Economics, 15(4): 667–682.
  4. Alam, Shamma Adeeb, and Claus C Pörtner. 2018. “Income shocks, contraceptive use, and timing of fertility.” Journal of Development Economics, 131: 96–103.
  5. Andersen, Asger Lau, and Joydeep Bhattacharya. 2018. “Can government policies reverse fertility decline? Evidence from a social experiment in Sweden.” Journal of Public Economics, 166: 127–141.
  6. Ang, Alvin. 2015. “The effects of cash transfer programmes on fertility: Evidence from Latin America.” The Journal of Development Studies, 51(12): 1588–1605.
  7. Apouey, Benedicte, and Andrew E Clark. 2015. “Winning big but feeling no better? The effect of lottery prizes on physical and mental health.” Health Economics, 24(5): 516–538.
  8. Baizán, Pau, Arnstein Aassve, and Francesco C Billari. 2003. “Cohabitation, marriage, and first birth: The interrelationship of family formation events in Spain.” European Journal of Population/Revue européenne de démographie, 19(2): 147–169.
  9. Baker, Andrew C, David F Larcker, and Charles CY Wang. 2022. “How much should we trust staggered difference-in-differences estimates?” Journal of Financial Economics, 144(2): 370–395.
  10. Becker, Gary S. 1960. “An economic analysis of fertility.” In Demographic and Economic Change in Developed Countries. 209–240. Columbia University Press.
  11. Becker, Gary S. 1965. “A Theory of the Allocation of Time.” The Economic Journal, 75(299): 493–517.
  12. Becker, Gary S, and H Gregg Lewis. 1973. “On the interaction between the quantity and quality of children.” Journal of Political Economy, 81(2, Part 2): S279–S288.
  13. Berniell, Inés, Lucila Berniell, Dolores De la Mata, María Edo, and Mariana Marchionni. 2021. “Gender gaps in labor informality: The motherhood effect.” Journal of Development Economics, 150: 102599.
  14. Black, Dan A, Natalia Kolesnikova, Seth G Sanders, and Lowell J Taylor. 2013. “Are children “normal”?” The Review of Economics and Statistics, 95(1): 21–33.
  15. Bloom, David E, David Canning, Günther Fink, and Jocelyn E Finlay. 2010. “The cost of low fertility in Europe.” European Journal of Population / Revue européenne de Démographie, 26: 141–158. doi:10.1007/s10680-009-9182-1.
  16. Boserup, Simon H., Wojciech Kopczuk, and Claus T. Kreiner. 2016. “The Role of Bequests in Shaping Wealth Inequality: Evidence from Danish Wealth Records.” American Economic Review, 106(5): 656–61.
  17. Breivik, Anne-Lise, and Ana Costa-Ramón. 2022. “The career costs of children’s health shocks.” University of Zurich, Department of Economics, Working Paper, , (399). https://ssrn.com/abstract=3960821.
  18. Brewer, Mike, Anita Ratcliffe, and Sarah Dsmith. 2012. “Does Welfare Reform Affect Fertility? Evidence from the UK.” Journal of Population Economics, 25(1): 245–266.
  19. Briggs, Joseph, David Cesarini, Erik Lindqvist, and Robert Östling. 2021. “Windfall gains and stock market participation.” Journal of Financial Economics, 139(1): 57–83.
  20. Bulman, George, Robert Fairlie, Sarena Goodman, and Adam Isen. 2021. “Parental resources and college attendance: Evidence from lottery wins.” American Economic Review, 111(4): 1201–40.
  21. Bulman, George, Sarena Goodman, and Adam Isen. 2022. “The Effect of Financial Resources on Homeownership, Marriage, and Fertility: Evidence from State Lotteries.” NBER Working Paper. https://www.nber.org/papers/w30743.
  22. Caldwell, John C, Pat Caldwell, and Peter McDonald. 2006. “Policy responses to low fertility and its consequences: A global survey.” In Demographic Transition Theory. , ed. John C. Caldwell, 321–348. Springer.
  23. Callaway, Brantly, and Pedro HC Sant’Anna. 2021. “Difference-in-differences with multiple time periods.” Journal of Econometrics, 225(2): 200–230.
  24. Cesarini, David, Erik Lindqvist, Matthew J Notowidigdo, and Robert Östling. 2017. “The effect of wealth on individual and household labor supply: evidence from Swedish lotteries.” American Economic Review, 107(12): 3917–46.
  25. Cesarini, David, Erik Lindqvist, Robert Östling, and Anastasia Terskaya. 2023. “Fortunate Families? The Effects of Wealth on Marriage and Fertility.” NBER Working Paper. https://www.nber.org/papers/w31039.
  26. Cesarini, David, Erik Lindqvist, Robert Östling, and Björn Wallace. 2016. “Wealth, health, and child development: Evidence from administrative data on Swedish lottery players.” The Quarterly Journal of Economics, 131(2): 687–738.
  27. Chuard, Caroline, and Patrick Chuard-Keller. 2021. “Baby Bonus in Switzerland: Effects on Fertility, Newborn Health, and Birth-Scheduling.” Health Economics, 30(9): 2092–2123.
  28. Chu, CY Cyrus, Kamhon Kan, and Jou Chun Lin. 2019. “Variations of wealth resemblance by family relationship types in modern Chinese families.” Proceedings of the National Academy of Sciences, 116(14): 6548–6553.
  29. Cohen, Alma, Rajeev Dehejia, and Dmitri Romanov. 2013. “Financial incentives and fertility.” Review of Economics and Statistics, 95(1): 1–20.
  30. Cortes, Patricia, and Jessica Pan. 2020. “Children and the remaining gender gaps in the labor market.” NBER Working Paper. https://www.nber.org/papers/w27980.
  31. De Chaisemartin, Clément, and Xavier d’Haultfoeuille. 2020. “Two-way fixed effects estimators with heterogeneous treatment effects.” American Economic Review, 110(9): 2964–96.
  32. Del Boca, Daniela. 2002. “The effect of child care and part time opportunities on participation and fertility decisions in Italy.” Journal of Population Economics, 15(3): 549–573.
  33. de Quinto, Alicia, Laura Hospido, and Carlos Sanz. 2021. “The child penalty: evidence from Spain.” SERIEs, 12(4): 585–606.
  34. DGBAS. 2020. “Statistics on Social Protection Expenditure, 2020.” Directorate General of Budget, Accounting and Statistics, Taiwan. https://www.stat.gov.tw/News_Content.aspx?n=2734&s=27495.
  35. Doepke, Matthias. 2015. “Gary Becker on the quantity and quality of children.” Journal of Demographic Economics, 81(1): 59–66.
  36. FIA. 2022. “Statistics on Income Tax Return Deduction.” Fiscal Information Agency, Ministry of Finance. https://www.fia.gov.tw/WEB/fia/ias/isa108/isa108/108_40-1.pdf.
  37. FIA. 2023a. “Analysis of Receipt Lottery Winning and Prize Redemption.” Fiscal Information Agency, Ministry of Finance, https://sip.einvoice.nat.gov.tw/ods-main/ODS303E/CDF0EF68-72D2-4AF2-BAA1-15E8BE7311DD/0/Mjs=/.
  38. FIA. 2023b. “Winning Location Statistics — Winning Receipt Lottery Statistics.” Fiscal Information Agency, Ministry of Finance, https://sip.einvoice.nat.gov.tw/ods-main/ODS303E/1487A5C3-8F08-4F56-AB87-E00CC5429427/0/Mjs=/.
  39. Francesconi, Marco. 2002. “A joint dynamic model of fertility and work of married women.” Journal of Labor Economics, 20(2): 336–380.
  40. Furaker, Bengt, and Anna Hedenus. 2009. “Gambling windfall decisions: Lottery winners and employment behavior.” UNLV Gaming Research & Review Journal, 13(2): 1–16.
  41. Garganta, Santiago, Leonardo Gasparini, Mariana Marchionni, and Mariano Tappat’a. 2017. “The Effect of Cash Transfers on Fertility: Evidence from Argentina.” Population Research and Policy Review, 36(1): 1–24.
  42. Gauthier, Anne H. 2007. “The impact of family policies on fertility in industrialized countries: A review of the literature.” Population Research and Policy Review, 26(3): 323–346.
  43. Gietel-Basten, Stuart, and Georgia Verropoulou. 2018. “The changing relationship between marriage and childbearing in Hong Kong.” PLoS ONE, 13(3): e0194948.
  44. Golosov, Mikhail, Michael Graber, Magne Mogstad, and David Novgorodsky. 2023. “How Americans respond to idiosyncratic and exogenous changes in household wealth and unearned income.” Quarterly Journal of Economics.
  45. Gonz’alez, Libertad. 2013. “The Effect of a Universal Child Benefit on Conceptions, Abortions, and Early Maternal Labor Supply.” American Economic Journal: Economic Policy, 5(3): 160–88.
  46. Gonz’alez, Libertad, and Sofia Karina Trommlerov’a. 2021. “Cash Transfers and Fertility: How the Introduction and Cancellation of a Child Benefit Affected Births and Abortions.” Journal of Human Resources, 0220–10725R2.
  47. Goodman-Bacon, Andrew. 2021. “Difference-in-differences with variation in treatment timing.” Journal of Econometrics, 225(2): 254–277.
  48. Hankins, Scott, and Mark Hoekstra. 2011. “Lucky in life, unlucky in love? The effect of random income shocks on marriage and divorce.” Journal of Human Resources, 46(2): 403–426.
  49. Hankins, Scott, Mark Hoekstra, and Paige Marta Skiba. 2011. “The ticket to easy street? The financial consequences of winning the lottery.” Review of Economics and Statistics, 93(3): 961–969.
  50. Hsiao, Hsin-Huang. 2013. “A Social Intentions Survey of Public Welfare Lottery (C00268) [Original Data].” Retrieved from the Survey Research Data Archive of the Center for Survey Research, RCHSS, Academia Sinica, https://doi.org/10.6141/TW-SRDA-C00268-1.
  51. Hsia, Pei-Hsuan, An-Shun Tai, Chu-Lan Michael Kao, Yu-Hsuan Lin, and Sheng-Hsuan Lin. 2021. “Causal Mediation Analysis for Difference-in-Difference Design and Panel Data.”
  52. Huttunen, Kristiina, and Jenni Kellokumpu. 2016. “The effect of job displacement on couples’ fertility decisions.” Journal of Labor Economics, 34(2): 403–442.
  53. Imbens, Guido W, Donald B Rubin, and Bruce I Sacerdote. 2001. “Estimating the effect of unearned income on labor earnings, savings, and consumption: Evidence from a survey of lottery players.” American Economic Review, 91(4): 778–794.
  54. Jones, Gavin W. 2007. “Delayed marriage and very low fertility in Pacific Asia.” Population and Development Review, 33(3): 453–478.
  55. Jones, Larry E, Alice Schoonbroodt, and Michele Tertilt. 2011. “Fertility theories: Can they explain the negative fertility-income relationship?” In Demography and the Economy. , ed. John B. Shoven, 43–106. University of Chicago Press.
  56. Jones, Larry E, and Michele Tertilt. 2008. “An Economic History of Fertility in the United States: 1826–1960.” In Frontiers of Family Economics. , ed. P. Rupert, 165–230. Emerald Group Publishing Limited.
  57. Kim, Seonghoon, and Kanghyock Koh. 2021. “The effects of income on health: Evidence from lottery wins in Singapore.” Journal of Health Economics, 76: 102414.
  58. Kim, Wookun. 2022. “Baby bonus, fertility, and missing women.” Fertility, and Missing Women (March 10, 2022).
  59. Kim, Young-Il, Jongkwan Lee, Ki Nam Park, Andy Sumner, and Jaewon Yoon. 2014. “Lifetime Impact of Cash Transfer on Fertility.” World Development, 59: 184–197.
  60. Kleven, Henrik, Camille Landais, and Jakob Egholt Søgaard. 2019. “Children and gender inequality: Evidence from Denmark.” American Economic Journal: Applied Economics, 11(4): 181–209.
  61. Kuhn, Peter, Peter Kooreman, Adriaan Soetevent, and Arie Kapteyn. 2011. “The effects of lottery prizes on winners and their neighbors: Evidence from the Dutch postcode lottery.” American Economic Review, 101(5): 2226–47.
  62. Laroque, Guy, and Bernard Salani’e. 2014. “Identifying the Response of Fertility to Financial Incentives.” Journal of Applied Econometrics, 29(2): 314–332.
  63. Leth-Petersen, Søren. 2010. “Intertemporal Consumption and Credit Constraints: Does Total Expenditure Respond to an Exogenous Shock to Credit?” American Economic Review, 100(3): 1080–1103.
  64. Lien, Hsien-Ming, Chung-Hsin Tseng, Tzu-Ting Yang, Hsing-Wen Han, and Kuang-Ta Lo. 2021. “The Wealth Distribution in Taiwan 2004–2014: Evidence from the Individual Wealth Register Data.” Taiwan Economic Review, 49(1): 77–130.
  65. Li, Hongbin, Junsen Zhang, and Yi Zhu. 2008. “The quantity-quality trade-off of children in a developing country: Identification using Chinese twins.” Demography, 45: 223–243.
  66. Lindahl, Mikael. 2005. “Estimating the effect of income on health and mortality using lottery prizes as an exogenous source of variation in income.” Journal of Human Resources, 40(1): 144–168.
  67. Lindo, Jason M. 2010. “Are children really inferior goods? Evidence from displacement-driven income shocks.” Journal of Human Resources, 45(2): 301–327.
  68. Lindqvist, Erik, Robert Östling, and David Cesarini. 2020. “Long-run effects of lottery wealth on psychological well-being.” The Review of Economic Studies, 87(6): 2703–2726.
  69. Lovenheim, Michael F, and Kevin J Mumford. 2013. “Do family wealth shocks affect fertility choices? Evidence from the housing market.” Review of Economics and Statistics, 95(2): 464–475.
  70. Lyssiotou, Panayiota. 2021. “Can Ttargeted Child Benefits Affect Fertility? Evidence from a Natural Experiment.” The BE Journal of Economic Analysis & Policy, 21(3): 921–965.
  71. Malak, Natalie, Md Mahbubur Rahman, and Terry A Yip. 2019. “Baby Bonus, Anyone? Examining Heterogeneous Responses to a Pro-Natalist Policy.” Journal of Population Economics, 32(4): 1205–1246.
  72. Malkova, Olga. 2018. “Can Maternity Benefits Have Long-term Effects on Childbearing? Evidence from Soviet Russia.” Review of Economics and Statistics, 100(4): 691–703.
  73. Marchetta, Francesca, and David E Sahn. 2016. “The role of education and family background in marriage, childbearing, and labor market participation in Senegal.” Economic Development and Cultural Change, 64(2): 369–403.
  74. Milligan, Kevin. 2005. “Subsidizing the Stork: New Evidence on Tax Incentives and Fertility.” Review of Economics and Statistics, 87(3): 539–555.
  75. Myong, Sunha, JungJae Park, and Junjian Yi. 2021. “Social Norms and Fertility.” Journal of the European Economic Association, 19(5): 2429–2466.
  76. OECD. 2019a. “Family benefits public spending (indicator).” Organisation for Economic Co-operation and Development. doi:10.1787/8e8b3273-en.
  77. OECD. 2019b. “Fertility rates (indicator).” Organisation for Economic Co-operation and Development. doi:10.1787/8272fb01-en.
  78. OECD. 2023. “Family benefits public spending (indicator).” Organisation for Economic Co-operation and Development. doi:10.1787/8e8b3273-en.
  79. Picchio, Matteo, Sigrid Suetens, and Jan C van Ours. 2018. “Labour supply effects of winning a lottery.” The Economic Journal, 128(611): 1700–1729.
  80. Riphahn, Regina T, and Frederik Wiynck. 2017. “Fertility Effects of Child Benefits.” Journal of Population Economics, 30(4): 1135–1184.
  81. Roser, Max. 2014. “Fertility Rate.” Our World in Data. https://ourworldindata.org/fertility-rate.
  82. Roser, Max. 2020. “GDP per capita, 2020.” Our World in Data. https://ourworldindata.org/grapher/gdp-per-capita-worldbank.
  83. Saez, Emmanuel, and Gabriel Zucman. 2016. “Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data.” The Quarterly Journal of Economics, 131(2): 519–578.
  84. Sieppi, Antti, and Jaakko Pehkonen. 2019. “Parenthood and gender inequality: Population-based evidence on the child penalty in Finland.” Economics letters, 182: 5–9.
  85. Sleebos, J. 2003. “Low fertility rates in OECD countries: Facts and Policy Responses.” OECD Labour Market and Social Policy Occasional Papers, No. 15. doi:10.1787/568477207883.
  86. Stichnoth, Holger. 2020. “Short-run Fertility Effects of Parental Leave Benefits: Evidence from a Structural Model.” Empirical Economics, 59(1): 143–168.
  87. Sun, Liyang, and Sarah Abraham. 2021. “Estimating dynamic treatment effects in event studies with heterogeneous treatment effects.” Journal of Econometrics, 225(2): 175–199.
  88. Upchurch, Dawn M, Lee A Lillard, and Constantijn WA Panis. 2002. “Nonmarital childbearing: Influences of education, marriage, and fertility.” Demography, 39(2): 311–329.
  89. Yeung, Wei-Jun Jean, Sonalde Desai, and Gavin W Jones. 2018. “Families in southeast and South Asia.” Annual Review of Sociology, 44: 469–495.
Citations (1)
View on Semantic Scholar

Summary

We haven't generated a summary for this paper yet.

Ai Sparkles Streamline Icon: https://streamlinehq.com Summarize Now