The impact of the bonus at birth on reproductive behaviour in a lowest-low fertility context: Friuli-Venezia Giulia (Italy) from 1989-2005

As of 1 January 2000 the government of the north-eastern Italian region of Friuli- Venezia Giulia (FVG) introduced a substantial bonus at birth. The birth bonus was differentiated by marital status (only married women were eligible), citizenship (only Italians were eligible), and birth order (the bonus grew for the second and especially the third birth). Moreover, the income threshold below which one got the bonus was fairly high. As of 1 January 2004 a new government substantially reduced the bonus amount as well as the upper income limit. We evaluate if the bonuses handed out in FVG during those four years (2000-03) had a significant impact on fertility and abortion choices, verifying whether fertility changed in a different way for women more affected by the new legislation. We also test if the impact of monetary measures was higher for less educated women, because in Italy the relationship between income and education is very strong, and the bonus was practically the same irrespective of income level, hence its relative impact should be stronger in a poorer family. We use two different methods: First, we compare the trends of births and abortion ratios, separately for women affected and not affected by the monetary measures, looking at the differential changes. Second, using log-linear models, we measure if the interactions among time, parity, marital status, citizenship and education are statistically significant in the direction that follows our expectations. Our results show that for low educated (and hence also less rich) women with one or (especially) two and more children, birth trends did change after 1999, whereas the trends for childless women living in FVG and for low-educated women living in other Italian regions did not change.