President Trump is considering paying mothers $5000 per childbirth. The rationale behind this proposal is obvious. Paying mother’s for giving birth incentivizes higher birth rate. A higher birth rate may reverse the projected decline in the US population. Of course, $5000 covers only a small part of the expense of raising a child. However, the marginal effect of an extra $5K would nudge couples who are close to affording an additional child.
Is this Baby Bonus program really necessary? Economic analysis indicates that certain government policies have reduced birth rates in the United States. According to one study, car-seat laws have reduced the number of families with three or more children. Many cars can’t fit three car seats for small children, so some couples have decided to have fewer children. Data indicates that child car seats have in fact saved 57 children from dying in car crashes. Data also indicates that child car seat laws have reduced the number of births by 145,000.
Economist Bryan Caplan has also argued that zoning laws make housing less available and much more expensive. Making housing less available and more expensive limits the ability of young Americans to start families and have children. Trump’s $5,000 baby bonus doesn’t go far in addressing our inflated housing costs, and does even less to address housing availability.
Young American couples should decide how many children to have freely, without either encouragement or discouragement by government policies. Repealing both zoning laws and child seat requirements would remove important disincentives to having more children. Trump’s baby bonus plan is unnecessary in terms of the low birth rate problem- better solutions exist, and would make the Federal deficit even worse.
