Government Policy Can Impact Birth Rates
In an earlier discussion on child tax credits, someone asked if there was any research on whether or not governments can impact childbearing with financial incentives. The answer is yes.
In the late 80's, the provincial government of Quebec began paying parents for having children. From this 1990 article in the Chicago Tribune:
With one of the lowest birth rates in the Western world, the provincial government of Quebec is taking action to bolster its dwindling numbers: It is paying residents to reproduce.
Since May of 1988, Quebec has been offering parents a bonus for each baby they bring into the world. Last month, the government raised the stakes in its race for bigger families, increasing the cash bonus that goes to parents of a third child from $4,500 to $6,000.
So what were the results? Bryan Caplan discusses the experiment in his wonderful book "Selfish Reasons to Have More Kids":
From May 1992 to September 1997, Quebec's parents got Can$500 for their first child, two payments of Can $500 for their second child, and twenty payments of Can$400 (Can$8000 in total) for each additional child. The program was then abolished. The main researcher who studies the program concluded that Can $1000 in first-year benefits -just over 700 American dollars at the time - increased the probability of having a child by 16.9 percent. Families eligible for the full Can$8000 payment plan were 25% more likely to have another child.
So there you have it. While I am not in favor of these subsidies, there apparently is a real effect. So perhaps one of the side benefits of increasing the child tax credit would be to increase the birth rate in the U.S.
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Nov '11
Re: Government Policy Can Impact Birth Rates
People will do what you pay them to do. If you pay them to work, they work. If you pay them not to work, they won't work. If you pay them to have babies, they'll have babies.
After the Iran-Iraq War, Iran gave people money to have children, and so they did.
On the non-payment front, I recall hearing a story about concern over low birth rates in West Germany a couple of decades ago, and the government stopped all TV broadcasts after 10pm and it seemed to stop the problem.
I don't think a tax credit would have the same impact here in the US. If you paid people cash to have babies, that might be different.
Sep '10
Re: Government Policy Can Impact Birth Rates
Isn't this common sense?
Oct '10
Re: Government Policy Can Impact Birth Rates
Yes, but common sense does not tell you anything about the magnitude of the effects (i.e. the shape of the demand curve).
May '10
Re: Government Policy Can Impact Birth Rates
Welfare support for unwed mothers, which increases when she has more children, is paying people to have babies.
Tax relief, or even a bonus like this one, is better conceived as easing some of the financial burden to make it easier for parents to have more children.
Nov '11
Re: Government Policy Can Impact Birth Rates
katievs: Welfare support for unwed mothers, which increases when she has more children, is paying people to have babies.
Tax relief, or even a bonus like this one, is better conceived as easing some of the financial burden to make it easier for parents to have more children. · Jan 5 at 7:27am
Entirely true.
So the question here is:
Should the government be using the tax dollars of some citizens to subsidize the choices of others?
Dec '11
Re: Government Policy Can Impact Birth Rates
I dont know. I cant think of a single middle class person I know who takes taxes into account before having children.
I think evolving sexual norms around sexual promiscuity, contraception, and abortion have more to do with it than any pitance from the government.
Edited on Jan 5 at 7:41amRe: Government Policy Can Impact Birth Rates
Guruforhire: I dont know. I cant think of a single middle class person I know who takes taxes into account before having children.
I think evolving sexual norms around sexual promiscuity, contraception, and abortion have more to do with it than any pitance from the government. · Jan 5 at 7:39am
Edited on Jan 05 at 07:41 am
Really? It seems that fear about the ability to afford having children is one of the huge drivers of this among my friend set. Like, far and away the biggest concern. As reported by my friends, at least. My husband and I knew we weren't in great financial shape but decided that we'd burn that bridge when we came to it. We're glad we've been blessed with children. Even if, you know, we have no idea how we're going to retire.
Mar '11
Re: Government Policy Can Impact Birth Rates
The social science varies as to how much government policies and labor market conditions affect fertility rates and which policies are most effective, but there is very little question that they do have an effect.
In this case, social science and common sense coincide.
Dec '10
Re: Government Policy Can Impact Birth Rates
I was the one, I think, that asked about data. Thanks for looking this up!
So, now, if we take it as a given that government intervention can have an effect on a population's fertility rate (for now, let's take it as a given) we have some additional questions:
1) If one thinks the government should encourage some people to have more children, what are the criteria we are going to use to determine who "some people" are, exactly?
2) What is the ROI on direct government subsidy when compared with other potential interventions, or, perhaps, the elimination of fertility-limiting factors that are State generated?
For the record, I am very suspicious that such a government scheme would be worth pursuing. Even so, I do agree the State currently has an interest in promoting fertility amongst persons above a certain income level.
But once you start saying it like that, things get very, very hairy, and destructive of liberty. Hence my suspicion we are better off considering how to get the State out of such schemes entirely.
Dec '10
Re: Government Policy Can Impact Birth Rates
Are the children government is paying to have born likely to be producers and contributors to society or drains on society? I can't imagine a vast increase in the number of crack babies works out in the long run.
Nov '11
Re: Government Policy Can Impact Birth Rates
How do you figure this?
Aug '10
Re: Government Policy Can Impact Birth Rates
Hey, this is America . We spend our money to kill babies, not have more of them !
Edited on Jan 5 at 3:32pmJul '10
Re: Government Policy Can Impact Birth Rates
Hey wait. Here's an idea. A flat tax with a low rate. That will allow citizens to spend their money as they see fit. If a ca. $1000 baby credit is the difference between someone procreating and not, then we are in worse shape than we think.
The government should have no business in social engineering schemes like this, whether we like the result or not. Because the same reason you say "we should have this exemption or tax code for the good of the U.S. citizenry" is the same reason leftists impose their vision, which is worse.
In other words, Big Government that works for 'conservative'' values is the same Big Government that can be used for "progressive" values. In both cases, it's wrong and in fact, is why the Constitution is written the way it is.
Mar '11
Re: Government Policy Can Impact Birth Rates
Todd
Yes, but common sense does not tell you anything about the magnitude of the effects (i.e. the shape of the demand curve). · Jan 5 at 7:27am
It's hard to say based on this limited data, but the effect (1 in 6 families more likely to have a first child) seems rather small, no?
Thus increasing the cost of the child tax credit to other taxpayers yet more.
Mar '11
Re: Government Policy Can Impact Birth Rates
Michael Tee: Hey wait. Here's an idea. A flat tax with a low rate. That will allow citizens to spend their money as they see fit. If a ca. $1000 baby credit is the difference between someone procreating and not, then we are in worse shape than we think.
The government should have no business in social engineering schemes like this, whether we like the result or not. Because the same reason you say "we should have this exemption or tax code for the good of the U.S. citizenry" is the same reason leftists impose their vision, which is worse.
In other words, Big Government that works for 'conservative'' values is the same Big Government that can be used for "progressive" values. In both cases, it's wrong and in fact, is why the Constitution is written the way it is. · Jan 5 at 3:39pm
Agree 100%
May '10
Re: Government Policy Can Impact Birth Rates
KarlUB:
1) If one thinks the government should encourage some people to have more children, what are the criteria we are going to use to determine who "some people" are, exactly?
I prefer tax deductions or credits or whatever the term is. That automatically limits the benefit to tax payers.
I don't see income level as the distinction.
What the government (rightly understood) has an interest in is strong, responsible, self-supporting, intact families. Those produce strong, self-reliant, contributing members of society.
Dec '11
Re: Government Policy Can Impact Birth Rates
I don't know if the kind of people who will have a child for a few thousand bucks are the kind of people who should be having children.
Mar '11
Re: Government Policy Can Impact Birth Rates
Fred Cole
How do you figure this? · Jan 5 at 10:46am
Children of wealthy parents tend to have above-average incomes themselves.
More wealthy young people = more money to close the upcoming SSI/Medicare hole.
I think Karl's unspoken point is that just because the state has an interest in new taxpayers does not necessarily mean that it is in society's interest as well.
Dec '10
Re: Government Policy Can Impact Birth Rates
Mendel
Fred Cole
How do you figure this? · Jan 5 at 10:46am
Children of wealthy parents tend to have above-average incomes themselves.
More wealthy young people = more money to close the upcoming SSI/Medicare hole.
I think Karl's unspoken point is that just because the state has an interest in new taxpayers does not necessarily mean that it is in society's interest as well. · Jan 5 at 4:15pm
But the people this kind of policy has the most effect on are not wealthy parents.
Mar '11
Re: Government Policy Can Impact Birth Rates
katievs
What the government (rightly understood) has an interest in is strong, responsible, self-supporting, intact families. Those produce strong, self-reliant, contributing members of society. · Jan 5 at 4:01pm
I agree with this statement 100%. However, I don't see how government subsidies encourage self-reliance.
There are two interrelated problems here: 1) (possibly) not enough new births in America, and 2) not enough self-reliance among the youth who have already been born. I'm not sure that using tax incentives to deal with problem 1) makes problem 2) any better. In fact, it might be just the opposite.