Yifei Li, Chenbing Zhou, and Tianshu Xia, University of Colorado Denver
In recent decades, the United States has experienced a continuous decrease in fertility, which raises concerns regarding labor force shortages and the sustainability of old-age welfare programs. Several states have implemented pronatalist policies, but their effectiveness has not been fully examined. This paper analyzes the impact of parental leave and the child tax credit on fertility at the state level between 1999 and 2023. We construct a panel dataset including fertility and net fertility as the key dependent variables. Net fertility is defined as the infant-survival-adjusted fertility rate, calculated using the infant mortality rate and the general fertility rate. We apply a two-way fixed effects model controlling for both state and year effects. We find a weak marginal positive effect of parental leave on net fertility, while the child tax credit shows no statistically significant impact. These findings align with previous literature suggesting that work-related leave policies have a more consistent positive impact than direct cash transfers.
Read the full paper here.