Taxing the stork

We examine the tax-deduction incentive for parents to have babies in December rather than January, focusing on whether or not parents get "shotgun married. " We choose this focus because non-shotgun-married parents are more likely than shotgun-married parents to time conception and, consequently, the birth of their children. Results show that in the 1976 forward sample, the tax deduction is positively correlated with December births among non-shotgun-married parents, who are likely to time conception for tax purposes, but not among shotgun-married parents. In other samples, the differential effect between shotgun- and non-shotgun-married parents, is consistent as predicted.