Wookun Kim (Southern Methodist University)

Baby Bonus, Fertility, and Missing Women

Abstract. Total fertility rates have declined across many developed countries. Many policies have been implemented in an attempt to reserve this trend. This paper presents novel causal evidence on the effects of one such policy—pro-natalist financial incentives offered in South Korea—on fertility, sex, and infant health. I exploit rich spatial and temporal variation in cash transfers provided to families with newborn babies and the universe of birth, death, and migrant registry records. I find that the total fertility rate in 2015 would have been 3% lower without the cash transfers. The selection of working mothers into childbearing decreased gestational age, leading to an overall reduction in birth weight, but no change in early-life mortality. The cash transfers had an unintended consequence of correcting the unnaturally male-skewed sex ratio.