A re-appraisal of the fertility response to the Australian baby bonus
AbstractThe Australian baby bonus offering parents $3,000 on the birth of a new child was announced on May 11 2004. The availability of five years of birth data following the introduction of the baby bonus allows for a more comprehensive analysis of the policy implications than is current in the literature. The focus of this paper is to identify if there is a positive fertility choice response to the introduction of the Australian baby bonus policy and if this response is sustained over time. To do this 19 years of birth and macroeconomic data, beginning 1990, is analysed using an unobservable components model. The results indicate a significant increase in birth numbers ten months following the announcement of the baby bonus, and this overall increase was sustained up to the end of the observed period. A cumulative growth in birth numbers which commenced in January 2006 slows in 2008 and 2009. It is suggested that the initial increase in births, identified in March 2005, is a direct fertility response to the introduction of the policy and that the subsequent change in the growth of birth numbers may be the result of a delayed effect working through a number of channels. It is estimated that approximately 119,000 births are attributable to the baby bonus over the period, at an approximate cost of $39000 per extra child.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27580.
Date of creation: 20 Dec 2010
Date of revision:
Fertility Rate; Time Series; baby bonus;
Other versions of this item:
- Sarah Sinclair & Jonathan Boymal & Ashton De Silva, 2012. "A Re‐Appraisal of the Fertility Response to the Australian Baby Bonus," The Economic Record, The Economic Society of Australia, vol. 88(s1), pages 78-87, 06.
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- D10 - Microeconomics - - Household Behavior - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-03 (All new papers)
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