Demographics and the birth rate

26 Aug

Betsy Shaw at BabyCenter blogged about changes in fertility rates in North America and Europe.

In Australia we have the baby bonus, originally a sum of $3000 given to parents when a child was born back when the scheme started on 1 July 2004. On 1 July 2006 the baby bonus was increased again. Now, if you had a baby due on 30 June, would you be tempted to hold off as much as possible, if it were medically safe? Would you delay an induction?

Professor Joshua Gans and Dr Andrew Leigh wrote a paper called “Born on the First of July: An (Un)Natural Experiment in Birth Timing”. Gans and Leigh estimate that over 1000 births were moved to ensure their parents were eligible for the baby bonus, with 1 July 2004 showing the highest number of births on one day in the past 30 years. Obviously there were births which occurred in the week from 1 July 2004 which were expected to have been in the previous week.

Analyzing a subsample of birth records, we find that babies born in early-July were significantly heavier than those born in late-June, which would be consistent with parents delaying births to obtain the payment. All of this provides an indication that shifting was, in fact, real and not a result of reporting issues or fraud.

Given that the policy was announced only 7 weeks before it came into effect, planned conception for the baby bonus can be discounted.

Section 5 of the paper looks at parental and child characteristics.

If the introduction effect caused parents to delay birth, then it should be the case that babies born after the Baby Bonus was introduced will weigh more than those born just before the introduction. […]

The increased share of high birth weight babies that accompanied the introduction of the Baby Bonus might potentially have led to adverse health consequences. While babies born pre-term and/or underweight are less likely to be healthy, the same is also true of babies born too late and/or overweight. […]

Nonetheless, while the evidence on birth weight suggests that the introduction of the Baby Bonus might have put some children at risk, we do not find strong evidence that this had more dire consequences.

Food for thought.

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Posted by on August 26, 2008 in Child Development, Children's Health


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