Can we buy our way to higher fertility? It’s a pressing question, with the U.S. hitting record-low birth rates and policymakers clamoring for ideas.
A new Hoover Institution working paper from Jon Hartley and Benjamin Jaros—the former of whom might be a familiar name to CJ readers—helps to answer the question. It analyzes a recent policy experiment: Michigan’s “baby bonus” program, called Rx Kids, which since 2024 has paid thousands of dollars to mothers in a growing set of municipalities.
In Flint, where the program started, Hartley and Jaros find that the policy increased births by around 7.5 percent. That’s impressive. But it reflects a cost of about $107,000 per additional birth, and some of this effect may merely reflect changes in the timing of births rather than the total number of kids a mother has.
In terms of research design, the nice thing about Rx Kids is it was rolled out gradually. That allows the researchers to compare births in Flint against trends elsewhere in the state to see if fertility surged when the program started—and run similar exercises for cities like Kalamazoo and Pontiac, which adopted the program later.
Flint’s version of the program paid $1,500 before birth and then $500 per month for up to a year—for a total of $7,500—with few limitations aside from the mother living in Flint and enrolling no later than six months after birth. Other municipalities that adopted the program later kept the $500 monthly payments to just three, for a maximum of $3,000.
The authors’ analyses clearly identify a big jump in births in the treated cities. However, the authors note two potential issues with their methods.
One is migration: If parents-to-be moved into these cities for the purpose of collecting the bonus, the increase in births could reflect mere relocation and not an actual fertility increase. However, the increases are still evident in larger areas that combine the treated cities with the nearby places folks would be most likely to move from—and the nearby areas, by themselves, didn’t experience the declines in births one would expect of expectant parents were leaving.
Relocation doesn’t seem to be driving the effect here, though that’s not to say the impact is exactly zero or that it won’t be higher in the future. Those planning to have kids may gradually self-select into participating cities when they make job and housing decisions, with effects that become stronger over time.
The other is timing, which is a common empirical challenge in fertility studies. Basically, when births go up in the short term, it can be hard to say whether couples are having more kids in total, or if they’re just starting their families a bit earlier thanks to the new financial cushion. Unfortunately, measuring this in Michigan will require further research using longer-run data.
Because of these limitations, based on this study I’m inclined to see $107,000 as more of a floor than a ceiling for what it costs to get one extra baby through a universal bonus program like Rx Kids—a policy that pays all parents, including those who’d have had kids either way, rather than trying to target the couples most likely to be swayed by the cash. That’s in line with what I wrote for City Journal last year, discussing other work in this area.
As I said then, “pronatal” policies can work, but they’re pretty expensive. At more than $100,000 per birth, bringing America back up to replacement-level fertility would require new annual spending in the hundred-billion-dollar range.
From the Manhattan Institute
Andy Smarick explains the powers that governors have to reform public higher ed.
Check out City Journal’s affordability agenda, with contributions from Rafael Mangual (on crime), Ken Girardin (electricity), Chris Pope (health care), Neetu Arnold (higher ed), Judge Glock (sales taxes), Eric Kober (housing), Allison Schrager (regulation), James Meigs (fuel), Jarrett Dieterle (food), and John Ketcham (leveraging the benefits of density).
Other Work of Note
The strong, ongoing link between marriage and fertility. The role of social norms in fertility around the world. Some results from surveying “early midlife singles,” 30-to-50-year-olds who were not married or cohabiting. And some data on couples where wives do and don’t take their husbands’ last name.
A Yale committee reports on what might be undermining trust in higher education.
Is the Earned Income Tax Credit overrated as a way to increase work among single mothers?
Why does the public hate the environmental ideas that economists love, such as cap-and-trade and pollution taxes?
American Compass vs. the Tax Foundation on tariffs.
Two new papers on police chases.
An interesting look at the impact of Secure Communities, a program through which local and federal agencies cooperated to deport illegal immigrants who’d been arrested.
Can a simple meeting deter criminal reoffending?
How credit cards’ rewards and fees redistribute money upward.
Debating the merits of expanding the child tax credit to those with little or no income. And some ideas for reducing fraud and other payment problems in child-related credits.
Does not getting into college turn people against affirmative action?
The effects of opening high schools between 1850 and 1910.
A challenge to school choice: This study claims that private schools’ high test scores come not from better instruction, but from a combination of (A) enrolling high-ability students and (B) the peer effects that come from putting high-ability students together.
Are the kids alright? Depends what kind of survey you use to measure.
Flavored-tobacco bans seem to reduce youth use.
The case for eliminating parking requirements for new housing.
What actually happens when an institutional investor buys housing?
Federal taxes fall far short of what the government spends, but most Americans still think they pay too much.
“At more than $100,000 per birth, bringing America back up to replacement-level fertility would require new annual spending in the hundred-billion-dollar range.”
the tone here sounded cautionary and pessimistic but in reality that seems like incredibly high EV and should be good news if true ?