Seminar

I study fertility adjustments after the introduction of a large universal child benefit in Poland. I find a large immediate increase in fertility nine months after the announcement of the program. The patterns of selection into parenthood changed significantly and persistently, as the positive selection on education has weakened and the negative selection on income has strengthened. The gap in birth rates between low-income and high-income couples exceeded 50%, in a stark contrast to zero gaps in the pre-introduction period. In a microsimulation approach, I combine the birth rate changes and existing estimates of labor supply effects of the transfer to study the impact of these adjustments on poverty reduction associated with the transfer. Despite significant fertility adjustments, their adverse effects on the poverty reduction were very small.