Born on the First of July: An (Un)natural Experiment in Birth Timing

Joshua Gans and Andrew Leigh

No 529, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: It is well understood that government policies can distort behaviour. But what is less often recognized is the anticipated introduction of a policy can introduce its own distortions. We study one such “introduction effect”, using evidence from a unique policy change in Australia. In 2004, the Australian government announced that children born on or after July 1, 2004 would receive a $3000 “Baby Bonus.” Although the policy was only announced a few months before its introduction, parents appear to have behaved strategically in order to receive this benefit, with the number of births dipping sharply in the days before the policy commenced. On July 1, 2004, more Australian children were born than on any other single date in the past thirty years. We estimate that over 1000 births were “moved” so as to ensure that their parents were eligible for the Baby Bonus, with about one quarter being moved by more than two weeks. Most of the effect was due to changes in the timing of inducement and caesarean section procedures. This birth-timing event represents a considerable opportunity for health researchers to study the impact of planned birthdays and hospital management issues.

Keywords: introduction effect; timing of births; policy distortion (search for similar items in EconPapers)
JEL-codes: H31 J13 (search for similar items in EconPapers)
Date: 2006-07
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (5)

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Journal Article: Born on the first of July: An (un)natural experiment in birth timing (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:529

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