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Baby Bonuses: Natural Experiments in Cash Transfers, Birth Timing and Child Outcomes

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  • Nathan Deutscher
  • Robert Breunig

Abstract

We use the 1 July 2004 introduction of the Australian Baby Bonus to identify the effect of family income on child test scores at grade three. Using a difference†in†differences design, we find no evidence that the Baby Bonus improved child outcomes in aggregate, but some evidence of a modest effect for children from disadvantaged backgrounds. We examine whether birth shifting associated with the Baby Bonus and two other Australian maternity payments had negative long†term effects on children. Despite widespread concerns about this unintended treatment, regression discontinuity estimates provide no clear evidence of lasting health or educational consequences.

Suggested Citation

  • Nathan Deutscher & Robert Breunig, 2018. "Baby Bonuses: Natural Experiments in Cash Transfers, Birth Timing and Child Outcomes," The Economic Record, The Economic Society of Australia, vol. 94(304), pages 1-24, March.
    • Handle: RePEc:bla:ecorec:v:94:y:2018:i:304:p:1-24
    DOI: 10.1111/1475-4932.12382
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    Cited by:

    1. de Gendre, Alexandra & Schurer, Stefanie & Zhang, Angela, 2021. "Two Decades of Welfare Reforms in Australia: How Did They Affect Single Mothers and Their Children?," IZA Discussion Papers 14752, Institute of Labor Economics (IZA).
    2. Alex Proshin, 2020. "Impact of Child Subsidies on Child Health, Well-being and Parental Investment in Human Capital: Evidence from Russian Longitudinal Monitoring Survey 2011-2017," PSE Working Papers halshs-02652268, HAL.
    3. Lebihan, Laetitia & Mao Takongmo, Charles-Olivier, 2018. "The impact of universal child benefits on family health and behaviours," Research in Economics, Elsevier, vol. 72(4), pages 415-427.
    4. Gaitz, Jason & Schurer, Stefanie, 2017. "Bonus Skills: Examining the Effect of an Unconditional Cash Transfer on Child Human Capital Formation," IZA Discussion Papers 10525, Institute of Labor Economics (IZA).
    5. Sergi Sánchez-Coll, 2023. "Born this way: the effect of an unexpected child benefit at birth on longer-term educational outcomes," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 14(1), pages 105-141, March.
    6. Wang, Julia Shu-Huah & Zhang, Jinbao & Fu, Tsung-Hsi, 2021. "The effects of universal child allowance on family expenditure in Taiwan," Children and Youth Services Review, Elsevier, vol. 129(C).
    7. Alex Proshin, 2023. "Impact of Child Subsidies on Child Health, Well-Being, and Investment in Child Human Capital: Evidence from Russian Longitudinal Monitoring Survey 2010–2017," European Journal of Population, Springer;European Association for Population Studies, vol. 39(1), pages 1-92, December.
    8. de Gendre, Alexandra & Lynch, John & Meunier, Aurélie & Pilkington, Rhiannon & Schurer, Stefanie, 2021. "Child Health and Parental Responses to an Unconditional Cash Transfer at Birth," IZA Discussion Papers 14693, Institute of Labor Economics (IZA).
    9. Jolene Tan, 2023. "Perceptions towards pronatalist policies in Singapore," Journal of Population Research, Springer, vol. 40(3), pages 1-27, September.
    10. Cristina Borra & Ana Costa-Ramón & Libertad González Luna & Almudena Sevilla, 2021. "The causal effect of an income shock on children’s human capital," Economics Working Papers 1789, Department of Economics and Business, Universitat Pompeu Fabra.
    11. Marcotte, Dave E. & Engel, Katherine, 2023. "Baby Bump? Birth Month, Family Income, and Early Childhood Development," IZA Discussion Papers 16212, Institute of Labor Economics (IZA).
    12. Hema Shah & Lisa A. Gennetian, 2024. "Unconditional cash transfers for families with children in the U.S.: a scoping review," Review of Economics of the Household, Springer, vol. 22(2), pages 415-450, June.
    13. Alex Proshin, 2020. "Impact of Child Subsidies on Child Health, Well-being and Parental Investment in Human Capital: Evidence from Russian Longitudinal Monitoring Survey 2011-2017," Working Papers halshs-02652268, HAL.

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