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Serial correlation

Serial correlation. Do child care benefits affect birth rates? Total Fertility Rate (TFR) versus Family Benefits (FB) Yearly data from Hungary, 1951 to 2004 Based on A. Gabos, R. Gal, and G. Kezdi (2006). We took the log of them (for elasticity).

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Serial correlation

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  1. Serial correlation Do child care benefits affect birth rates? Total Fertility Rate (TFR) versus Family Benefits (FB) Yearly data from Hungary, 1951 to 2004 Based on A. Gabos, R. Gal, and G. Kezdi (2006) • We took the log of them (for elasticity). • We tested them and realized that each follows a stochastic trend. • Conclusion: we have to analyze (log) differences

  2. OLS, usual SE The time series of the first log differences: Δlog(TFRt) versus Δlog(FBt) Δlog(TFRt) = α + β1Δlog(FBt-1) + ut OLS with usual standard errors

  3. OLS, Newey-West SE or lagged LHS or GLS

  4. OLS with lagged LHS + proxies Proxies: Contemporary change in FB Lagged change in GDP Dummies for years 1953-55 and 1973-73

  5. There is more Do pensions affect birth rates as well? Adding pensions (P) /also normalized by GDP/ Same yearly data from Hungary, 1951 to 2004

  6. OLS: simplest + full model

  7. And more How about birth rates by birth order? # children born as kth child Right axis: TFR Left axis: TFR by birth order

  8. OLS: full models Different LHS variables, all RHS variables. Only the key parameters shown

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