Better late than less

Hundreds of pregnant women are expected to delay giving birth to take advantage of the $742 rise in the baby bonus payment, which comes into effect on July 1.

The payment will increase from $4258 to $5000 for all babies born after 12.01am on July 1.

The sudden increase will encourage some women to defer births by elective caesarean or induction for the extra money, academics fear.

Australian National University economist Andrew Leigh said his research showed that the introduction of the baby bonus in 2004 and the $800 increase in the payment in 2006 led to almost 2000 births being moved for economic reasons.

In 2004, 1005 babies were born on July 1 - the day the baby bonus was introduced. That was the highest number of births on a single day in the past 30 years.

A further 928 babies were born on July 2, 2004, which was the fifth-highest number of births on a single day in the past 30 years.

Conversely, only 500 babies were born on June 30, 2004, compared with an average of 733 babies born on an average weekday.

"Birth days are surprisingly predictable but these figures clearly show that the baby bonus created a financial incentive to delay birth," Dr Leigh said.

"If it was just some people delaying birth it would be less of a concern but the figures are fairly stark.

"We have birth data going back 30 years and the number one birthday in that time is July 1, 2004. There were more babies born on that day than any other day in the past 30 years.

"I don't believe that is just pure coincidence."

Dr Leigh and his co-researcher, Professor Joshua Gans of the University of Melbourne, recorded a similar pattern of births when the baby bonus was increased by $800 to $4000 from July 1, 2006.

In the last week of June 2006, 4603 babies were born compared with 5394 babies in the first week of July 2006.

Dr Leigh said this caused a bout of unhealthily heavy babies and he predicted a similar pattern over the next fortnight, with women undergoing elective caesareans or induced births expected to defer the procedures until after June 30. Continued...