The Effect Of Personal Tax Exemption On Fertility In Indonesia
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Personal tax exemption (PTKP) can influence fertility choices by changing the costs or benefits of childbearing and increasing family disposable income. This study aims to analyze the effect of personal tax exemption on the addition of children in Indonesia. Using IFLS data waves 4 and 5 and the Linear Probability Model method, this study shows an inverse U-shaped relationship between the addition of children and personal tax exemption. The inverse U-shaped relationship indicates that the marginal effect of personal tax exemption decreases as the value of personal tax exemption increases. In addition, the probability of adding children is also influenced by the mother's characteristics (age and working status), other adult female family members in the household, and the number of children. This study reveals that the taxation variable, PTKP, can affect fertility. Thus, birth control should be carried out by considering various aspects other than direct birth control (e.g., family planning), including taxation.
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