April 24, 2007

Bucks for Babies

Declining births in much of the developed world have prompted politicians to offer big bucks for babies.

In some areas of Italy, couples can bag as much as 10,000 euros for a newborn. Australia offers $4000.
Japanese couples are already being offered incentives for new births but now corporations like Matsushita are getting into the act and offering increased family allowances to workers with two or more children.

Do incentives work? Depends how you define success. A financially-strapped couple might have a child earlier than they would have otherwise, but in Australia there were reports that some parents were using the baby bonus to buy plasma TVs and other non-essential items rather than using the funds to cover child-related expenses.

An interesting article by Ross Guest titled The Baby Bonus: A Dubious Policy Initiative suggests that the Australian policy "will reward parents who would have had children anyway."
What do you think?

[Flickr photo
by anonfx]
Technorati Tag:

4 comments:

elaine said...

Hmmmm...I don't know about the tax structure in other countries, but here in the US, there are clear tax and workplace incentives for parents.

With the population at it's current rate, those who fear the demise of the human race are jumping the gun. There are more than 6.5 billion people worldwide. This far exceeds the planets carrying capacity...
I would like to see some monetary incentives for NOT reproducing...but hey, that's just me...

emeraldwednesday said...

I would tend to agree that this money is going to benefit people who would just have kids anyway. Even 10 grand is unlikely to put much of a dent in the total cost of raising a child (including college tuition). And if I were planning to have a baby anyway, with the attendant expenses, that money really would be a "bonus" so why not buy a TV? A total waste of tax money if you ask me. Like we need more people anyway...

Ashley said...

These tax incentives seem a little pointless. If an aging population is your concern wouldn't it be better to put that money into the social programs that pay for the elderly? What they need to offer are incentives to save for retirement so that an aging population is not such a problem.

iceberg1 said...

I'm Australian and can tell you that the baby bonus given out by the government (starting a few years ago) is being given credit for an increase in the number of babies born, but only by government and NOT by demographers. Demographers know that there are more women between the ages of about 32 - 36 than those in the 10 years above or below (there was a mini-baby boom born in the early 70s). In other words - more women, more babies even if they have only 1. Of course, this means less babies from now on because there are less (younger) women (unless the women all plan to have an extra baby for some reason). The increase can also be attributed somewhat by good economic times, but since home mortgages have exploded in the last three years this is certainly acting as a contraceptive for lower middle-class and working class women/couples.