Government Incentives to Overcook Babies

by on March 24, 2008 at 7:45 am in Economics | Permalink

Australia has a baby bonus.  The birth rate shot up on the day the bonus first went into effect, July 1, 2004.  As Andrew Leigh and Joshua Gans explained, over 1000 births were delayed from June to July and about 300 births were delayed by more than two weeks.

The bonus is scheduled to rise from $4,187 to $5,000 this July 1 and Leigh and Gans have pleaded with the government to phase it in order to prevent too much birth delay which they think could be unhealthy for the child.  Alas, the government has declined.

All of which leads Andrew to denounce, in delightful Aussie-speak, the bonus as an "unhealthy incentive for women to over-cook their babies."

I couldn’t agree more.  As a libertarian and a humanist I join with Andrew to denounce all government incentives to overcook babies.

Hat tip to Dave Undis.

Jip March 24, 2008 at 7:56 am

I agree this is a strange act on the part of government.

However, the welfare state’s disincentivizing of child birth has a significant bit to do with the plunging child birth rate. Now the welfare state is trying to undo what it has caused over the last century.

Thomas E. Woods has done some good writing on this front tying plunging international birthrates to the expansion of social safety-net programs world-wide.

Brian Headrick March 24, 2008 at 8:58 am

If a parent is worried about the damage that leaving a child
in the womb for an extra two weeks or more will cause, then
perhaps they should be responsible and not worry about the
extra money, as nothing is more valuable than a healthy child.

Peter March 24, 2008 at 10:12 am

We may be seeing various delaying – or accelerating – tactics in use in America, this time involving the other end of the lifespan, when the federal estate tax will be repealed for 2010 and reinstated the following year.

It’s late December 2009 and Granny’s circling the drain? Do whatever is necessary to keep her alive and kicking (okay, not necessarily kicking) until you hear “Happy New Year,” and it could save a lot of $$$. On the other hand, if it’s late in December 2010 and she’s in a similarly distressed state, well, nobody will mind a little plug-pulling.

Jacqueline March 24, 2008 at 10:40 am

I thought more time in the womb was a good thing?

meter March 24, 2008 at 11:43 am

I’ll give Alex his self-proclaimed “libertarian” label. But “humanist?” I’ve read the posts here – seems like a reach.

Justin March 24, 2008 at 1:11 pm

But if consenting adults want to overcook their babies, is it really appropriate for the state to prevent them?

TitaniumDreads March 24, 2008 at 1:47 pm

uhhh, this is stupid? Why doesn’t australia just import enterprising immigrants from all the countries that are, ahem, totally fucked?

Marcin Tustin March 24, 2008 at 3:52 pm

TitaniumDreads: Because they absolutely hate immigrants. To the point where if you make it to the mainland you’ll be interned, and in the case of one set of refugees, they had them interned on a foreign island in the pacific.

Cliff March 24, 2008 at 5:56 pm

It was my understanding they are desperate for immigrants and encourage immigration. Skilled immigration, anyway.

Dingbat March 25, 2008 at 2:22 pm

APGAR isn’t everything, or, really, very much, in the long term. And A $742(AU) incentive to keep babies in isn’t much compared to the US incentives to pop ‘em out before the new year. The back-of-envelope calculation which induced (ultimately) the birth of a child I know (at 9:45 PM on Dec. 31, 2006) put the value of his tax incentive at about $3000 US. And early is almost always less good than late.

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