Research evaluates impact of the Baby Bonus

13 December 2016

Image; Bridget Ciola, Filckr.

We found no discernible effect. Our analysis could rule out even very small effects, sufficient only to lift a child one place in a class of 200.

New research into NAPLAN scores of kids born on either side of the 1 July 2004 start date for the Federal Government's $3,000 Baby Bonus has found that the payments have had no impact on academic performance.

The study from The Australian National University (ANU) Crawford School of Public Policy sought to identify any lasting effects of cash payments to families.

Lead data analyst and PhD scholar Nathan Deutscher said that while the Baby Bonus wasn't introduced with the stated aim of improving school results, it was a useful experiment in the effectiveness of family payments more broadly.

"In 2016 the Australian Government expects to spend nearly $25 billion on cash payments to families, which are typically very hard to evaluate," Mr Deutscher said.

"There's a lot of research showing the importance of early childhood, but it is easy to oversell. We wanted to test whether a modest boost to family income during those early years had any impact on later outcomes.

"We found no discernible effect. Our analysis could rule out even very small effects, sufficient only to lift a child one place in a class of 200."

The sharp cut off for the Baby Bonus also led to a lot of concern around unintended consequences as parents delayed c-sections in order to qualify: there were more births on 1 July 2004 than on any other date in Australian history.

But Mr Deutscher said he found no evidence of any lingering issues from the hospital crowding and larger birth weights that resulted.

"There was a lot of academic and media interest at the time but we couldn't find lasting effects on the kids," Mr Deutscher said.

"They were 60 grams higher in birth weight and more likely to be classified as high-birthweight kids. Despite that, we didn't see them having better or worse NAPLAN scores as a result.

"It seems parents, obstetricians and doctors were able to manage things in such a way that kids didn't come out worse off."

The results of the study have been published as a working paper jointly with Professor Bob Breunig.

The research looked at NAPLAN testing for more than 300,000 Grade 3 students over five years.