Financial Incentives, Fertility, and Son Preference in Armenia
Armenia experienced dramatic demographic changes in the past three decades: the share of adults age 65 and over nearly doubled, the total fertility rate reduced by more than 30 percent, and the male-to-female sex ratio at birth increased to one of...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/196481624327666333/Financial-Incentives-Fertility-and-Son-Preference-in-Armenia http://hdl.handle.net/10986/35825 |
| Summary: | Armenia experienced dramatic demographic
changes in the past three decades: the share of adults age
65 and over nearly doubled, the total fertility rate reduced
by more than 30 percent, and the male-to-female sex ratio at
birth increased to one of the world’s highest. Like other
middle-income countries concerned with the implications of
an aging population for long-term growth and fiscal
sustainability, Armenia introduced financial incentives to
promote fertility. This paper estimates the effect of the
2009 reform of the universal Childbirth Benefit Program,
which increased the amounts of lump sum transfers
conditional on birth. The analysis relies on a
quasi-experimental strategy exploiting the timing of the
policy change and eligibility rule—women get a larger
transfer for third and higher-order births. The findings
show that the annual probability of an additional birth
among women with at least two other children increased
between 1.4 and 1.6 percentage points in the five years
following the policy change. These effects are equivalent to
58 and 64 percent of the pre-reform birth probability for
women who had at least two children. Given the previously
demonstrated relationship between fertility level and sex
ratio in societies with strong son preference, the reform
may potentially alleviate the sex imbalance without directly
targeting it. Parents who already have at least one son and
are less likely to engage in sex selection and more likely
to have additional births; however, the findings do not
indicate a significant increase in the likelihood of having daughters. |
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