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

22 Pages Posted: 20 Jun 2006

See all articles by Joshua S. Gans

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

Andrew Leigh

Australian House of Representatives Parliament House; Centre for Applied Macroeconomic Analysis, ANU; IZA

Date Written: June 2006

Abstract

It is well understood that government policies can distort behavior. 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 cesarean 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

JEL Classification: H31, J13

Suggested Citation

Gans, Joshua S. and Leigh, Andrew, Born on the First of July: An (Un)Natural Experiment in Birth Timing (June 2006). Available at SSRN: https://ssrn.com/abstract=909862 or http://dx.doi.org/10.2139/ssrn.909862

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

HOME PAGE: http://www.joshuagans.com

NBER ( email )

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United States

Andrew Leigh

Australian House of Representatives Parliament House ( email )

Canberra, 2600
Australia

Centre for Applied Macroeconomic Analysis, ANU ( email )

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200
Australia

IZA ( email )

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