Population Effects of Local Government Cash Transfers

Abstract

This study seeks to assess the population impact of cash transfer policies, particularly childbirth grants and farmer’s basic income support scheme using Synthetic Control Methods (SCM). Childbirth grants are evaluated based on the number of births and the fertility rate of married women of reproductive age, while farmer’s basic income support is assessed in terms of the number of farmers. The analysis results indicated an increase in birth rate in Gangwon Province, Gwangju Metropolitan City, Daejeon Metropolitan City following the implementation of childbirth grants, while no significant effect was observed in other cities and provinces. Gangwon Province, Gwangju and Daejeon Metropolitan City show positive effects despite differences in support levels, with Gangwon Province experiencing sustained increases due to policy changes in subsequent years. However, if some provinces and local authorities exhibited increases in birth rates after the implementation of childbirth support grants, the effect was mostly short-term. The effect of childbirth support funds in local authority showed a similar trend. In local authority in small metropolitan areas where the amount of childbirth support allowance is small, the effect of such funds was found to be minimal. However, in medium-sized cities and rural areas, short-term effects were observed. In the case of farmer subsidies, initial increases are followed by subsequent decreases in the number of farmers, indicating limited long-term effectiveness.