Regular blog readers might recall that in June last year, Joshua Gans and I released a paper (copy here) on the impact that the sudden introduction of the $3000 Baby Bonus had on births. Because a baby born on 1 July 2004 got $3000, plenty of mothers delayed having their baby until July 2004. We estimated that around 1000 births were moved from June to July 2004. Most of these were moved by just a few days, but some were moved by more than two weeks. Why? Because when everyone wants to book in for a planned c-section on 1 July 2004, the maternity hospitals hit capacity (there were more births on 1 July 2004 than any other day in the last 32 years).
When our study came out, we said that the one thing the government shouldn’t do was to suddenly raise the baby bonus on 1 July 2006. But they did raise it – by $834 – and new daily births data allow us to look at the effects of that. We find (the new study is here) that the new increase led to 600 births being moved from June 2006 to July 2006. It’s hard to know the health impact of this, but changing the timing of births for non-medical reasons can only have adverse health impacts on mothers and babies.
“It’s a good thing that these men chose economics and not obstetrics,” Mr Brough said. “The timing of the birth of a baby is between a woman and her doctor and to suggest that a woman would put the life of her unborn baby at risk to get more money is an insult.”
But of course, many did move births. Is Brough really telling us that it’s merely a crazy coincidence that the #1 birthday in 32 years is the day the Baby Bonus began? And as for our career choice, you don’t have to believe economists. Here’s what the peak obstetricians’ bodyÂ had to say last June, a few days after our report came out.
A leading obstetrician has called on the Federal Government to bring forward the date of the rise in the baby bonus to reduce the risk of women delaying birth to secure the extra money.
The director of Women’s and Children’s Health Services at the Royal Prince Alfred Hospital, Dr Andrew Child, has approached the Government with his concerns.
The Royal Australian and New Zealand College of Obstetricians and Gynaecologists has also approached the Government, expressing its concern that mothers and babies could be put at risk by delaying births to cash in on the bonus.
The baby bonus is due to increase from $3166 to $4000 next Saturday.
Dr Child, a past president of the college, calculated it would cost the Government about $5 million to bring the date forward to tomorrow based on figures showing that about 5000 babies were born nationally each week.
“If I were [federal Health Minister] Tony Abbott, I would think very seriously about that,” Dr Child said.
He said $5 million was not much compared with the potential health risks of delaying births.
“One suggestion is bringing it back to June 26. It’s one solution to a potential risk of people waiting too long and putting themselves or their baby at risk.”
Also in June 2006, the President ofÂ the Australian Medical Association made a similar recommendation, pointing out: “Whatever date Government puts down for bringing in these sorts of incentives will always bring with it this sort of behaviour” (ABC News, 25/6/06).
The Baby Bonus is due to go up again on 1 July 2008, probably by about $700. If it causes a few hundred births to be moved from June to July, clogging the maternity wards in early-July, it sounds to me as though the current federal government is pretty relaxed about that.
Media (courtesy of JG):