Women Rule: Preferences and Fertility in Australian Households

Using a unique dataset from Australia, we investigate how individual fertility preferences translate into fertility realizations. We find consistent evidence that the wife's preference is more important than the husband's preference in predicting subsequent births, no matter whether her initial fertility desire is higher or lower than that of her partner. We also explore the effects of the introduction of the non-means-tested Baby Bonus introduced in 2004 by testing whether the hypothesis that the cash transfers from the scheme increase the bargaining power of the partner with higher fertility desire, thus leading to an increase in fertility for couples with disagreement on fertility plans. Our findings do not support this hypothesis. They also do not suggest any significant fertility-enhancing effect of the scheme.