Does Cutting Child Benefits Reduce Fertility in Larger Families? Evidence from the UK’s Two-Child Limit

Abstract We study the fertility effects of restricting child-related social assistance to the first two children in the family. As of 2017, all third and subsequent children born on or after 6 April 2017 in the UK were made ineligible for approximately 3000 GBP of means-tested child benefits per year. Using a triple difference and regression discontinuity design, we leverage administrative births microdata to identify the impact of the two-child limit on higher-order births. We find little to no decline in higher-order fertility among low-income families, with our estimates indicating at most small elasticities relative to the literature.