Francesca Parodi (University of Milan)
Chiara Dal Bianco and Maria De Paola
This paper studies how increases in child-related cash transfers affect fertility and maternal labor supply. Using population-wide administrative data and exploiting hetero geneous reform-induced changes in benefit generosity, we estimate the causal effects of discrete increases in non-labor income on fertility and maternal labor supply at the ex tensive and intensive margins. Our design compares outcomes across adjacent treatment intensity groups defined using predetermined household economic conditions, allowing identification in the absence of untreated units. We find that higher transfers increase the probability of having an additional child only over a limited range of benefit increases, with effects concentrated in the middle of the income distribution. At the same time, increased benefit generosity reduces maternal labor supply in the medium run, even net of fertility responses, through both employment exits and reductions in working hours. We translate these effects into local elasticities and document substantial heterogeneity across income groups.