Announcement effects of health policy reforms: evidence from the abolition of Austria’s baby bonus

Abstract

We analyze the short-run fertility and health effects resulting from the early announcement of the abolition of the Austrian baby bonus in January 1997. The abolition of the benefit was publicly announced about 10 months in advance, creating the opportunity for prospective parents to (re-)schedule conceptions accordingly. We find robust evidence that, within the month before the abolition, about 8 % more children were born as a result of (re-)scheduling conceptions. At the same time, there is no evidence that mothers deliberately manipulated the date of birth through medical intervention. We also find a substantial and significant increase in the fraction of birth complications, but no evidence for any resulting adverse effects on newborns' health.

The Impact of Scheduling Birth Early on Infant Health

“…In Table 1, we report the estimated percentage-point shift in the number of births as a result of $1,000 in benefit or tax incentives, across different studies.We find almost a 2 percentage point increase in the probability of a (last week of) December birth with respect to a (first week of) January birth. The analyses of similarly well-publicized reforms in other countries lead to estimated effects of similar magnitude, such as the Tamm ( 2012) study for Germany (1.8 points) or the ones for Austria (Brunner and Kuhn 2014) and Australia (Gans and Leigh 2009). LaLumia et al (2015) find a smaller effect for the case of the US (about a 1-point increase), but they acknowledge that the tax benefits of a December versus a January birth are not well known.…”

“…Thus we can be reasonably certain that our estimated health effects are a result of the timing of birth, as opposed to conception. The birth timing effects found in previous studies, such as Brunner and Kuhn (2014) and Schulkind and Shapiro (2014), are likely to be a combination of birth-scheduling and the timing of pregnancy, thus making the results on newborn health difficult to interpret. We share this advantage with Gans and Leigh (2009), but in their case the reform generated an incentive to postpone birth, rather than bring it forward.…”

Effects of primary care cost-sharing among young adults: varying impact across income groups and gender

“…An additional complication in papers that use quasi-experimental research designs based on policy reforms or prices that vary by age, is that observed effects on utilization may be caused by a pure price effect at some point in time and/or by an anticipation effect due to forward-looking behavior. Assuming that individuals are forward-looking, they are likely to adapt to known changes in future policy [15, 16]. For example, evidence from the US suggests postponement of certain medical care awaiting Medicare coverage at age 65 [17] and a reduction in consumption of drugs for chronic diseases following the announcement of a future decrease in out-of-pocket prices [18].…”

Paid Parental Leave and Children's Schooling Outcomes

“…Gans and Leigh () assess the introduction of Australia's baby bonus in 2004; Neugart and Ohlsson () and Tamm () analyse the German parental leave reform in 2007). In contrast, for Austria, Brunner and Kuhn () do not find evidence of manipulation of the date of birth as a response to the abolition of the Austrian baby bonus in 1997. Note, that the proportion of caesarean sections among all births was low in comparison to the US or Australia: the rate was 12% in Austria in 1995 (earliest date available), while it was about 30% in Australia in 2004 (Gans and Leigh, ) and about 23% in 1990 in the US (Osterman and Martin, ).…”