Baby Bonuses and One-Child Policies

My Baby Bonus paper with Joshua Gans is written up in the People’s Daily. I may never again match this readership. I can’t help wondering what a country with a one-child policy makes of a baby bonus. Since I’ll be in Beijing on July 1, when the Australian bonus goes up, I’ll have to find out.

In related news, a reader emails with details about the Singaporean Baby Bonus:

Children bring joy to the family. The Baby Bonus Scheme, first introduced in April 2001 and enhanced in August 2004, supports parents’ decision to have more children by helping to lighten the financial costs of raising children. The Scheme now benefits the 1st and 4th child born on or after 1 August 2004. Parents will get a cash gift of $3,000 for the 1st child, and a cash gift and co-savings of up to $9,000 for the 2nd child and up to $18,000 each for the 3rd and 4th child.

Twice the benefit for the third child as for the second. Now there’s a country that doesn’t believe Gary Becker’s work on the quality-quantity tradeoff.

This entry was posted in Economics of the Family. Bookmark the permalink.

20 Responses to Baby Bonuses and One-Child Policies

  1. Sacha says:

    Reading this, I was reminded of how, in Arthur C. Clark’s novels Chinese families could in the future pay a fine for a second kid, which doubled for the third, which then doubled for the fourth, and so on…

  2. There’s a big downside. You would have to live in Singapore.

  3. Patrick says:

    I can tell you what some of the Chinese think: that’s their future.

  4. Russell Hamilton says:

    Patrick, what do you think – should the Chinese attempt to limit their population in the ways they do ?

  5. Sacha says:

    … it meant that the wealthy could have lots of kids. I’m sure the fine per kid doubled each time – a nice exponential charge!

  6. Sinclair Davidson says:

    I seem to recall the Chinese have relaxed the one-child policy.

    To be controversial (I know, unusual for me), the Chinese don’t have a population problem, they have an economic growth problem. As their standard of living increases, people will voluntarily have fewer kids.

  7. Russell Hamilton says:

    Sacha, I was asking Patrick that question because it often seems to me that economists ignore the real world, and in this case the Chinese came up against a cruel reality – too many Chinese. Something seems awfully wrong when people in one country are paid to have children and people in another are prevented from having them.

  8. Russell Hamilton says:

    Sinclair – just how much more room will they have as their economic growth increases ?

  9. Sinclair Davidson says:

    None. They would have to use the rather large space they already occupy more intensively. But I take the point that you’re making. I suspect, however, that natural decreases in population growth will set in long before geography (and environment) becomes a binding constraint. I also recognise that you nad others would disagree on that point. I’m not sure, however, how our disagreement could be objectivily resolved.

  10. Patrick says:

    RH – no, I don’t think so at all. I think the Chinese government is an immoral government!

    I don’t mind some level of financial penalty – ie only one child has access to state education (although reserving my opinion as the oxymoronic status of ‘state education’), or bonuses eg for every ten years of marriage with only one child, etc.

    I would think it perverse and wrong, but not immoral per se, as I find ‘one-child’. I am not at all a China bull – I think there is so much potential, but the place is so much more fragile than most westerners seem to think. Their self-created demographic disaster is hardly evidence to the contrary – on the bright side, it should help Africa get richer.

    I could be wrong, of course!

    PS I am not an economist, for clarity.

  11. Sacha says:

    “Something seems awfully wrong when people in one country are paid to have children and people in another are prevented from having them.”

    Do you think, Russell? Doesn’t this just reflect what different governments perceive as being in their countries interests?

  12. Sacha says:

    “None. They would have to use the rather large space they already occupy more intensively.”

    Taller buildings in Shanghai!

    “I suspect, however, that natural decreases in population growth will set in long before geography (and environment) becomes a binding constraint.”

    That’s my guess too.

  13. Christine says:

    “Something seems awfully wrong when people in one country are paid to have children and people in another are prevented from having them.”

    I’m with Russell on this: if the Chinese think they have too many babies, and the Australians (Canadians/Germans/whoever) think they don’t have enough, what’s wrong with Australia taking the ‘extra’ Chinese babies – and their parents too, mind you? I actually do think baby bonus schemes have quite serious nationalistic/racist elements to them – in the case of Quebec’s it was fairly explicit that they were aiming for more French-speaking kiddies from whitish families. Sounds like Barnaby Joyce was making similar comments? (Though I gather that’s expected: sadly being o/s these days I don’t have as good a feel for the personalities.)

  14. Sacha says:

    Yes, Singapore was deadly boring.

  15. Sacha says:

    Christine – I agree that babies should be able to be shifted around as required – why shouldn’t they be? I don’t like nationalistic stuff much.

    I don’t have kids, and I don’t want kids (neither does my partner), and it seems that often people want “their own” (genetically related) kids…

  16. Tanya says:

    Sacha – In Australia, it does look as though people want genetically-related children. But perhaps it looks like that because there are so few Australian children available for adoption AND overseas adoption laws and procedures in every Australian state are terrible. That is to say, it looks like Australians choose to have their own children when possible but in fact what is happening is that there are serious restrictions of choice. Take a look at the US and many European countries with better foreign adoption laws/procedures and you’ll see that both the infertile and the fertile happily choose overseas adoption. It seems to me that the adoption situation in Australia is limited by a nasty combination of conservatives with (at least borderline) racist attitudes and lefties with a nanny-state mentality.

  17. Sacha says:

    I don’t have any information on this Tanya except about the few situations I personally know. I’ve heard that in NSW it costs about $30,000 to adopt a baby from overseas – that’s extraordinary if it’s true!

  18. Patrick says:

    It seems to me that Tanya lives in a fantasy world that is somehow strangely connected to ours so that she can comment on our websites!

    First, overseas adoption is tremendously expensive anywhere civilised, secondly, it carries with it far greater difficulties, particularly in disease-conscious Australia, than local adoption, thirdly, anyone who thinks it is unnatural for parents to prefer children that look like them needs to spend some time on this planet, fourthly, overseas adoption carries huge risks of exploitation with it, and fifthly, encouraging overseas adoption would cost tremendously more than baby bonuses.

    That said, I do strongly support adoption, as indeed to most conservatives in my (let me suggest somewhat greater) experience.

  19. Andrew Leigh says:

    “It seems to me that Tanya lives in a fantasy world that is somehow strangely connected to ours so that she can comment on our websites!”

    >> Patrick, be nice now please…..

  20. Russell Hamilton says:

    Sinclair, “They would have to use the rather large space they already occupy more intensively …. I’m not sure, however, how our disagreement could be objectivily resolved. ”

    No, I’m not either but I tend toward caution when the stakes seem so high.

    When I first moved to China I lived quite a long way out of the city (Canton) and rode even further out each day to swim in a reservoir (you can take the boy out of Australia etc), within a few years the bucolic scene outside my windows had changed from market gardens, fish/duck ponds, little roads bordered by trees etc to basically, well, concrete. They built a 6 line hwy to HK which was instantly lined with factories, all the people who had to be moved out of Canton to make way for office blocks, hotels etc were rehoused in big concrete apartment blocks (I ended up in one of those), they built a huge sports stadium, an amusement park …and on it rolled for mile after square mile.

    Last time I visited I felt like Rip Van Winkle – the natural world had disappeared – I suspect it was the best agricultural land that went. China is big, but it’s not all fertile. This is being replicated all over the developing world. It would be nice to think that technological solutions or future demographic shift would mean everything will turn out OK, but what if new chemicals and fiddling around with genes don’t solve the problems we’re creating – or even if they might, what if the lag time is too long – or what about the millions of displaced wretches who lose virtually everything to make way for new dams ..??

    Maybe we can have, and need, economic growth, but probably not the kind we’re seeing – too many downsides.

Comments are closed.