Baby bonus in Switzerland: Effects on fertility, newborn health, and birth-scheduling

This paper studies the effect of birth allowances (so-called baby bonus) on fertility, newborn health, and birth-scheduling in Switzerland. Switzerland provides an optimal quasi-experiment: 11 out of 26 cantons introduced a baby bonus during the last 50 years at different points in time. To identify the effect of changes in the baby bonus, we employ an event study with control groups using several administrative data sets on births, stillbirths, and infant deaths in Switzerland from 1969 to 2017. While there is no evidence for birth-scheduling, we find, however, a sizable but only temporary increase in the fertility rate of 5.5% and a permanent but diminishing increase in the birth weight of 2.8%. The latter effect is particularly strong at the lower end of the birth weight distribution. Furthermore, we document substantial heterogeneity by citizenship of mothers.