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

CollectionsANU Centre for Economic Policy Research (CEPR)
Title: Born on the First of July: An (Un)natural Experiment in Birth Timing
Author(s): Gans, Joshua S
Leigh, Andrew
Keywords: introduction effect
timing of births
policy distortion
Date published: Jul-2006
Publisher: Canberra, ACT: Centre for Economic Policy Research (CEPR), Research School of Social Sciences, The Australian National University
Series/Report no.: Discussion Paper no.529
Description: 
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.
URI: http://hdl.handle.net/1885/45249
ISBN: 0 7315 3599 5
ISSN: 1442-8636

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