Population Research and Policy Review

, Volume 30, Issue 3, pp 381–397

Did Australia’s Baby Bonus Increase Fertility Intentions and Births?

  • Robert Drago
  • Katina Sawyer
  • Karina M. Shreffler
  • Diana Warren
  • Mark Wooden
Article

DOI: 10.1007/s11113-010-9193-y

Cite this article as:
Drago, R., Sawyer, K., Shreffler, K.M. et al. Popul Res Policy Rev (2011) 30: 381. doi:10.1007/s11113-010-9193-y
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Abstract

In May 2004, the Australian government announced a “Baby Bonus” policy, paying women an initial A$3,000 per new child. We use household panel data from the Household, Income and Labour Dynamics in Australia Survey (N = 14,932) and a simultaneous equations approach to analyze the effects of this bonus on fertility intentions and ultimately births. The results indicate that opportunity costs influence intentions and births in predictable ways. Fertility intentions rose after the announcement of the Baby Bonus, and the birth rate is estimated to have risen modestly as a result. The marginal cost to the government for an additional birth is estimated to be at least A$126,000.

Keywords

Baby BonusBirthsFertilityHILDA Survey

Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  • Robert Drago
    • 1
  • Katina Sawyer
    • 2
  • Karina M. Shreffler
    • 3
  • Diana Warren
    • 4
  • Mark Wooden
    • 4
  1. 1.Institute for Women’s Policy ResearchWashingtonUSA
  2. 2.Pennsylvania State UniversityUniversity ParkUSA
  3. 3.Oklahoma State UniversityTulsaUSA
  4. 4.Melbourne Institute of Applied Economic and Social ResearchUniversity of MelbourneMelbourneAustralia