ABS births data out yesterday show another increase in fertility – from 1.79 babies per woman in 2005 to 1.81 in 2006. In the midst of an election campaign, the question naturally arises: how much credit can the baby bonus take for this increase?
I’m not aware of anyone who’s managed to parse out baby bonus effects from other slow-moving changes. This is a classic problem in time series econometrics, made messier by the fact that the impact of incentives on fertility takes effect with a lag. But one thing seems obvious: a flat $4187 is likely to have a bigger impact on the decisions of low-income families than high-income families. We don’t have data in the ABS births release on fertility by income, but they do tell us thatÂ the largest increase wasn’t among 20-29 year old mums, it wasÂ among the 30-39 year old mums. If this was a policy-induced change, that’s not the way you’d expect it to play out.
Update: I now realise that Andrew Norton made almost an identical point yesterday afternoon (also noting that teen births have continued to decline).