Financial Incentives, Fertility and Son Preference in Armenia

Abstract

This paper estimates the effects of a childbirth grant policy introduced in Armenia in 2009 in response to low fertility rates. We employ a quasi-experimental strategy exploiting the timing of the policy change and eligibility rule—women could get a larger transfer only for third and higher order births. We find an overall positive impact of the policy on the fertility of women who already had two births and we do not find heterogeneity in response to the policy by wealth, schooling or residence in rural versus urban area. While Armenia has one of the highest sex imbalances at birth, we do not find that additional newborns are significantly more likely to be male. We do find, however, that parents without any son are more likely to have an additional birth after the policy change in comparison to parents who already have at least one son.