They actually aren't the first ones to tackle this question. They cite at least four previous studies that found that parents alter birth timing to maximize tax and other public benefits. And sure enough, their research backs that up. LaLumia, Sallee and Turner used a Social Security Administration database to get the Social Security numbers for every child born between 2001 and 2010, and then collected all tax returns that included those SSNs in the year of the child's birth (if you're doing work like this, it really pays to have access to sensitive government data).
They then limited the sample to children born between Dec. 25 and Jan. 7. For each return in the sample, they use a tax calculator to estimate how much tax savings the parents of December babies got because of the early birth, and how much the parents of January babies lost out on. Then they get their linear regression on.
What they find is that, after controlling for other factors that could affect birth timing, an additional $1,000 in per-child tax benefits is associated with a 1 percent increase in the probability of a birth occurring in December rather than January. That's not huge, especially compared to some other studies; Syracuse's Stacy Dickert-Conlin and Harvard's Amitabh Chandra found a 29.6 percent increase in December births resulting from a $500 increase in tax benefits. But it does confirm that in even the most personal of choices, people respond to monetary incentives.