Ebenstein, Avraham, Moshe Hazan, and Avi Simhon. “Changing the Cost of Children and Fertility: Evidence from the Israeli Kibbutz.” The Economic Journal (early view; online first).
Prior to 1996, Israelis in collective communities (kibbutzim) shared the costs of raising children equally. This paper examines the impact of privatizing costs of children on the fertility behaviour of young couples. Exploiting variation in parental cost sharing across kibbutzim, we estimate that lifetime fertility declined by 0.65 children. We also examine the exit decisions of members, and find that couples were most likely to leave the kibbutz if they were either higher income or lower fertility. This pattern is also observed among Israeli emigrants, in which higher educated and lower fertility couples are more likely to leave Israel.