Sinclair, Sarah and Boymal, Jonathan and de Silva, Ashton (2010): A re-appraisal of the fertility response to the Australian baby bonus.
Download (190kB) | Preview
The 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.
|Item Type:||MPRA Paper|
|Original Title:||A re-appraisal of the fertility response to the Australian baby bonus|
|Keywords:||Fertility Rate, Time Series, baby bonus|
|Subjects:||J - Labor and Demographic Economics > J1 - Demographic Economics > J13 - Fertility; Family Planning; Child Care; Children; Youth
D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C22 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
D - Microeconomics > D1 - Household Behavior and Family Economics > D10 - General
|Depositing User:||Ashton de Silva|
|Date Deposited:||21. Dec 2010 08:08|
|Last Modified:||13. Feb 2013 14:50|
Australian Bureau of Statistics [ABS]. Births, Australia, 2009 (ABS cat. no.3301.0).Commonwealth of Australia, Canberra: Australian Bureau of Statistics. Available from http://www.abs.gov.au
Australian Bureau of Statistics [ABS]. Year Book Australia, 2009/ 10 (ABS cat. no.1301.0 page 301).Commonwealth of Australia, Canberra: Australian Bureau of Statistics. Available from http://www.abs.gov.au
Australian Institute of Family Studies 2004 ‘Fertility decision making’ – Research report no.11
Becker, G.S, 1960. ‘An Economic Analysis of Fertility. Demographic and Economic Change in Developed Countries’, Princeton: Princeton University Press for the National Bureau of Economic Research.
Becker, G.S., 1974. ‘A Theory of Social Interactions’. Journal of Political Economy, 82(6), 1063-93.
Becker, G.S., 1965. ‘A Theory of the Allocation of Time’. The Economic Journal, 75(299), 493-517.
Becker, G.S. & Barro, R.J., 1988. ‘A Reformulation of the Economic Theory of Fertility’. The Quarterly Journal of Economics, 103(1), 1-25.
Becker, G.S. & Lewis, H.G., 1973. ‘On the Interaction between the Quantity and Quality of Children’. The Journal of Political Economy, 81(2), S279-S288.
Becker, G.S. & Murphy, K.M., 2003. ‘Social Economics: Market Behavior in a Social Environment’ Belknap Press of Harvard University Press.
Becker, G.S. & Tomes, N., 1976. ‘Child Endowments and the Quantity and Quality of Children’. The Journal of Political Economy, 84(4), S143-S162.
Becker, G.S., 1991. ‘A Treatise on the Family’, Harvard University Press.
Bikhchandani, S., Hirshleifer, D. & Welch, I., 1992. ‘A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades’. Journal of Political Economy, 100(5), 992-1026.
Bongaarts, J. & Watkins, S.C., 1996. ‘Social Interactions and Contemporary Fertility Transitions’. Population and Development Review, 22(4), 639-682.
Casterline, J., Population, N.R.C.(.C.O. & Education, N.R.C.(.D.O.B.A.S.S.A., 2001. ‘Diffusion processes and fertility transition: selected perspectives’, National Academies Press.
Drago, R., Sawyer, K., Sheffler, K., Warren,D and Wooden, M , 2009, ‘Did Australia's baby bonus increase the fertility rate’ . Melbourne Institute of Applied Economic and Social Research, working paper series. Available at: http://www.melbourneinstitute.com/wp/wp2009n01.pdf [Accessed August 24, 2010].
Duclos, E., Lefebvre, P. and Merrigan, P. 2001, A ‘Natural Experiment on the Economics of Storks: Evidence on the Impact of Differential Family Policy on Fertility Rates in Canada, Working Paper no. 136, Center for Research on Economic Fluctuations and Employment (CREFE), University of Quebec, Montreal.
Durlauf, S. & Walker, J., 1999. ‘Social interaction and fertility transitions’, Wisconsin Madison - Social Systems. Available at: http://ideas.repec.org/p/att/wimass/199928.html [Accessed June 22, 2010].
Durlauf, S.N. & Young, H.P., 2004. ‘Social Dynamics’, MIT Press.
Easterlin, R.A., 1975. ‘An Economic Framework for Fertility Analysis’. Studies in Family Planning, 6(3), 54-63.
Gans, J.S & Leigh, A.,2009. ‘Born on the First of July: An (Un)natural Experiment in Birth Timing’. Journal of Public Economics, 2009, vol. 93, issue 1-2, pages 246- 263
Gans, J.S & Leigh A. 2007. ‘Born (Again) on the First of July: Another Experiment in Birth Timing’ The Selected Works of Joshua S Gans Available at: http://works.bepress.com/joshuagans/15
Gary S. Becker, James S. Duesenberry & Bernard Okun, 1960. ‘An Economic Analysis of Fertility’. In NBER Chapters. National Bureau of Economic Research, Inc, pp. 225-256. Available at: http://ideas.repec.org/h/nbr/nberch/2387.html
Gray M, Qu L, Weston R 2008 ‘Fertility and Family policy in Australia’. Melbourne: Australian institute of Family Studies.
Harvey, A.C., 1991. ‘Forecasting, structural time series models and the Kalman filter’ Cambridge University Press.
Hotz, V.J. & Miller, R.A., 1988. ‘An Empirical Analysis of Life Cycle Fertility and Female Labor Supply’. Econometrica, 56(1), 91-118.
Hotz, V.J. & Miller, R.A., 1993. ‘Conditional Choice Probabilities and the Estimation of Dynamic Models’. The Review of Economic Studies, 60(3), 497-529.
Hotz, V., Kerman, J. & Willis, R., 1996. ‘The Economics of Fertility in Developed Countries : A Survey’, RAND - Labor and Population Program. Available at: http://ideas.repec.org/p/fth/randlp/96-09.html [Accessed July 28, 2010].
Iyer, S. & Weeks, M., 2009. ‘Social Interactions, Ethnicity and Fertility in Kenya’, Faculty of Economics, University of Cambridge. Cambridge Working Papers in Economics 0903 Available at: http://ideas.repec.org/p/cam/camdae/0903.html
Kohler, H.-P. 1997. ‘Fertility and Social Interaction: An Economic Approach.’ Ph.D. diss. Department of Economics, University of California, Berkeley.
Leibenstein, H (1954) ‘A Theory of Economic Demographic Development’, Princeton, NJ: Princeton University Press.
Leibenstein, H (1957) ‘Economic Backwardness and Economic Growth’ New York: John Wiley and Sons.
Leibenstein H (1975), ‘The Economic Theory of Fertility Decline,’ The Quarterly Journal of Economics 89, no. 1 1-31.
Lain, S.J. et al., 2010. ‘The impact of the baby bonus on maternity services in New South Wales’ The Australian & New Zealand Journal of Obstetrics & Gynaecology, 50(1), pp.25-29.
Lain, S.J. et al., 2009. ‘The impact of the Baby Bonus payment in New South Wales: who is having "one for the country"?’ The Medical Journal of Australia, 190(5), pp.238-241.
Langridge, A.T. et al., 2010. ‘The impact of monetary incentives on general fertility rates in Western Australia’. Journal of Epidemiology and Community Health. Available at: http://www.ncbi.nlm.nih.gov/pubmed/20961871 [Accessed December 1, 2010].
Lattimore, R and Pobke, C 2008, ‘Recent trends in Australian Fertility’ Productivity Commission Staff Working Paper, Canberra, July
McDonald, P. & Kippen, R., 2001. ‘Labor Supply Prospects in 16 Developed Countries, 2000-2050’. Population and Development Review, 27(1), pp.1-32.
Milligan, K., 2005. ‘Subsidizing the Stork: New Evidence on Tax Incentives and Fertility.’ Review of Economics and Statistics, 87(3), 539-555.
Montgomery, M.R. & Casterline, J.B., 1996. ‘Social Learning, Social Influence, and New Models of Fertility’. Population and Development Review, 22, 151-175.
Robinson, W.C., 1997. ‘The Economic Theory of Fertility Over Three Decades’ Population Studies, 51(1), 63-74.