Burning the Bun in the Oven

Katherine Mangu-Ward | March 24, 2008

In Australia, they pay women to have babies. The amount of the baby bonus has been increasing in fits and starts, causing women to cross their legs and wait until the higher figures kick in before they let they kicking fetuses out.

The bonus, introduced by the previous Howard government in 2004 as a means of boosting birth rates and as an alternative to paid maternity leave, is due to rise to $5,000 from $4,187 on July 1....

Australian National University economist Andrew Leigh said it is an unhealthy incentive for women to over-cook their babies, with about 1,000 births delayed in 2004 so that mothers were eligible to receive the bonus.

Never fear! Freakonomics-style academics are on the case, with a 2004 paper[PDF] noting that this is a classic cause of government incentives causing harmful distortions--extra time in the womb can mean trouble for mom and baby. This time around, they'd hoped to convince the country to phase in the payments, but it looks like it's a no go.

Via Alex Tabarrok