Advances this year’s Mother’s Day, the White House has been exploring America’s uplift, including baby bonuses (i.e. government cash transfers at the time of the child’s birth).
This may sound like a strong incentive to have more children, but despite a considerable number of countries attempted this (Canada, Israel, Hungary, Germany, South Korea, Russia), whether baby bonuses actually increase fertility rates.
In Russia, for example, bonuses were huge (equivalent to 18 months of average wages), and expensive programs increased births by 20%. In Canada, the bonuses for fairly large babies are correlated with short-term increases in fertility, effectively encouraging parents to bring their children closer together rather than having a larger family in the end. In fact, there was no long-term impact on fertility rates.
One German state has specially introduced monthly home care cash transfers for families who do not use local public parenting centres. Interestingly, the programme increased births in several specific groups (single mothers, low-income families, foreign parents), but still had no average impact on the total population.
However, other government policies investing in mothers encourage childbirth more consistently. There is solid evidence that paid childcare leave increases fertility rates. This would fill the void in America’s shameful gap. With currently no paid parental leave nationwide, many mothers (and fathers) return to work in raw, crude form, sending newborns who have lost wages to care for their babies and have not been child-rearing.
That paid parental leave only slightly increases fertility rates, but it improves mothers’ health, increases child education achievement, and reduces the likelihood of intimate partner violence. All other wealthy countries in the world are paying for parental leave as they recognize the economic and health benefits of this investment.
The expansion of public childcare increases birth rates by reducing the financial burden that working parents face when they have children. In fact, the United States is very well-recruiting public children at our military bases. By expanding this service, we will ensure quality and affordable care for all of our children.
Even if baby bonuses aren’t the best way to achieve administration goals, it’s a great idea for the US. Because one in six American children currently live under the poverty line. Their family does not have stable housing. They are late in paying for their cars, can’t afford prescription medicines, and are desperately trying to be rewarded. Children cannot prosper being embedded. Even families with incomes far above the poverty line are overwhelmed by the cost of having children (hospital birth! Parenting! Minivans!). Since my spouse and I both work, we pay $2,100 a month to the youngest and that parenting ends at 3pm.
If the country really wants to invest in mothers and encourage American children to flourish, a one-off bonus is not enough. It does not address the systemic negligence that is our current state of child-rearing, maternity leave and child poverty. Baby bonuses may be one way to strengthen our bipartisan commitment to investing in mothers, but a new expansion of child tax credits will be the easiest first step (although Congress has been that recently). This bipartisan-supported tax credit allowed some parents to stay home with their children and subsidize childcare for working people. Dramatically.
Paid parental leave and public childcare actually increase fertility rates, but are small. These policies are necessary because American parents (especially mothers) are seeking help.
The choice to bring your child into this world is not a financial thing that can be incentivized for thousands of dollars. Creating a new life is a reflection of an act of hope, a commitment to the future, and a deeply held personal belief. Celebrating Mother’s Day with flowers, chocolate, or baby bonuses is a great gesture. But investing in mothers over the years raising children from pregnancy to childbirth, and over the years, makes a real difference.
Aine Seitz McCarthy is an associate professor of economics at Lewis & Clark College in Portland, Oregon, and a mother of two.
