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

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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https://hal.archives-ouvertes.fr/hal-03157256
Contributor : Nicolas MOREAU Connect in order to contact the contributor
Submitted on : Wednesday, March 3, 2021 - 8:44:48 AM
Last modification on : Wednesday, May 11, 2022 - 3:34:17 AM

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Nicolas Moreau. The Zero Effect of Income Tax on the Timing of Birth: Some Evidence on French Data. International Tax and Public Finance, In press, ⟨10.1007/s10797-022-09733-1⟩. ⟨hal-03157256⟩

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