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.