Born on the first of July: An (un)natural experiment in birth timing
AbstractIt is well understood that government policies can distort behavior. But what is less often recognized is that the anticipated introduction of a policy can introduce its own distortions. We study one such "introduction effect," using evidence from a unique policy change in Australia. In 2004, the Australian government announced that children born on or after July 1, 2004 would receive a $3000 "Baby Bonus." Although the policy was only announced seven weeks before its introduction, parents appear to have behaved strategically in order to receive the benefit, with the number of births dipping sharply before the policy commenced. On July 1, 2004, more Australian children were born than on any other single date in the past thirty years. We estimate that over 1000 births were "moved" so as to ensure that their parents were eligible for the Baby Bonus, with about one quarter being moved by more than one week. Most of the effect was due to changes in the timing of induction and cesarean section procedures. We find evidence to suggest that babies who were shifted into the eligibility period were more likely to be of high birth weight. Two years later, on July 1, 2006, the Baby Bonus was increased, and we find that this again caused births to be moved from June to July. These birth timing events represent an opportunity for health researchers to study the impact of planned birthdays and hospital management issues.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 93 (2009)
Issue (Month): 1-2 (February)
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Web page: http://www.elsevier.com/locate/inca/505578
Introduction effect Timing of births Policy distortion;
Other versions of this item:
- Joshua S. Gans & Andrew Leigh, 2006. "Born on the First of July: An (Un)natural Experiment in Birth Timing," CEPR Discussion Papers 529, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
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