Child Benefits and Fertility: Does Variation by Child Age and Birth Order Matter? Evidence from 26 European Countries

Child benefits have been ascribed a (small) positive effect on fertility rates. However, the relationship between child benefit design and fertility rates is underexplored, even though benefits have become more varied by child age and birth order over the past few decades, while also growing in aggregate terms. To fill this knowledge gap, this paper conducts a pooled time series regression analysis of the relationship between aggregate benefit size, variation by child age (2-year-olds vs. 9-year-olds), and variation by birth order (first, second, third, and fourth children), and aggregate and birth order-specific fertility rates in 26 European countries between 2002 and 2021. It controls for macroeconomic conditions (GDP growth and unemployment) and other family policies (full-rate- equivalent parental leave, childcare spending, and total family policy spending). The paper finds a positive and statistically significant association between aggregate benefit size and fertility rates for 26 European countries in 2002–2021, reaffirming the scholarly consensus around child benefits as an important component of the pronatalist policy toolkit. However, it provides little evidence of a “pronatalist premium” in size variation in favor of early childhood and higher birth orders, as only the latter is (sometimes) statistically significant. These findings highlight the importance of disaggregating the relationship between child benefits and fertility by child age and birth order, while inviting further (smaller-N) research into potential “pronatalist premiums” in variation by child age and birth order in higher-spending and explicitly pronatalist countries.