Friday, June 02, 2006

Fertility rises

Treasurer Peter Costello points out that ABS figures show births in Australia in 2005 were the highest since 1992. In 2005, there were 261,400 births, a 2.4% increase on 2004 but, most importantly, not a decrease - as has been the case since about 1960. Population aging and falling fertility are policy concerns that have been addressed by pro-natalist policies including:
  • The baby bonus introduced in July 2004;
  • Substantial increases in family benefits;
  • Provision of extra childcare places;
  • Encouragement of flexible family-friendly work practices.
Interestingly Costello also links the number of births to optimism about Australia’s future and feelings of improved economic security. Historically optimism has increased fertility.

In the May 2004 Budget Costello encouraged people to have 'One for mum, one for dad, and one for the country'. At least some families have done this.

8 comments:

civitas said...

Is it really likely than anyone has a baby because there are more nursery places or because they get a baby bonus? With the cost of raising a child as astronomical as it is, a baby bonus just doesn't seem like enough of an inducement. Is anyone having a baby they WOULDN'T have had without the baby bonus?

The improved economic situation seems a likely catalyst, I think the reason some Europeans have so few children is that they are insecure economically. Most parents want to know that they can financially support a child.

hc said...

I agree the baby bonuses are trivial in relation to the cost of raising children. The more plausible story then is the reduced risk and improved economic security.

I will post a study on this today -there does seem to have been a reduction in macroeconomic risk. But the improved economic conditions have been developing in Australia over 16 years. I am surprised that fertility has suddenly turned around.

I also think that changes in the tax system which effectively tax the family unit rather than individuals will stimulate fertility by making it relatively costly for women to mjoin the workforce.

conrad said...

There are weird trends in birth rates that are not taken into account by simply looking at the absolute total corrected for the population increase. These include people in a demographic bulge all getting close to the end of their fertility (and hence breeding), so I if I remember correctly, if you look at the age distribution of women giving birth, the increase is made up by late breeders (for lack of a better term).

Thus I think before the conclusion that the birth-rate is meaninfully increasing or at least stabalized is made, you need to have a more detailed analysis that include social factors like the general trend toward delaying births (which exists and is floating around somewhere I can't remember unfortunately).

Alternatively, you might be safer to conclude that the birth rate is not dropping, unlike many other countries.

Anonymous said...

Harry, I think you should have introduced this with a pregnant pause

civitas said...

conrad, I hink you're onto something with the "late breeder" syndrome. Look how many late boomers are squeezing out a third or fourth kid in their early to mid forties.

Anonymous said...

I am surprised no-one here is considering the 'echo' thesis...which is in the early 70s there was a rise in birth rates, an 'echo' of the first baby boomers between 1945-1950. The late 60s early 70s was the first echo when older baby boomers started having children. Given these children are now in their mid-late 30s this is a reasonable demographioc explaination - may have nothing to do with economics at all...

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Christine said...

Re whether baby bonuses work: a friend of mine (Kevin Milligan, UBC) looked at the Quebec version of the baby bonus, and found an increase in birth rates in Quebec relative to the rest of Canada, and an even bigger rise in 3rd children (the bonus was higher for the third child). All we need is people to be close to indifferent between an extra kid and not, and small $ can make a difference. Child care availability, mind you, is not a small thing. Definitely want to check birth rates, not just numbers of births, though, and the point on possibly weird age effects is a good one.

Might not be the third kid here, though, which would make me happier. Costello's line in a budget speech no less was, I thought, really cringeworthy.