Does a "Baby Bonus" Mean More Crime?

That’s the question asked by an Australian reader named Peter Gartlan:

In 2004, the Australian government introduced a $4,000 lump sum payment for having a baby, known as the Baby Bonus. [Note: it was judged to be somewhat effective.]

The anecdotal evidence is that this instantly created a huge wave of young unmarried teenage mothers from lower socioeconomic communities who saw the BB as a great big “free money” sign.  At the time it was also referred to as the “Plasma TV” bonus. Anyway, many teenage mothers had many babies, and received many payments. But obviously the motivation was money, not family. And $4,000 does not go very far when bringing up kids, as you know.

So after I read your “Abortion Reduces Crime” study, I wondered whether the BB would demonstrate the inverse scenario.

As you will note in this article from my local newspaper, it appears there is now evidence of the beginnings of a new juvenile crime wave.

It is easy to see how a baby bonus, like a variety of bounties we’ve explored, can have unintended consequences. It is a good research question, to be sure. (Australia is hardly the only country to have tried this.)