The White House is reportedly looking into a proposal that would offer new mothers a $5,000 “baby bonus” as a way to motivate Americans to have more children. However, many economists and social science experts are skeptical about whether this approach would be effective.
According to a report from The New York Times last month, the administration has been consulting with policy experts and advocates who support increasing birth rates in the U.S. Cash incentives and the reallocation of Fulbright scholarships are among the suggestions being explored.
Experts have voiced that a sum like this is insufficient to influence family planning decisions, especially considering the substantial costs associated with raising children. Jennifer Cyber, the president and CEO of the Population Reference Bureau, stated, “That amount is not considered meaningful enough to encourage most couples to have children.”
Both Vice President Vance and billionaire advisor Elon Musk are prominent figures in the pronatalist movement. Vance, for instance, expressed his desire for “more babies in the United States” at an anti-abortion rally in January.
Trump has referred to himself as a “fertility president” during his time campaigning and in office, though he hasn’t taken significant steps to boost birth rates.
U.S. fertility rates have been declining for decades, with a sharper drop observed since the Great Recession; by 2023, the numbers reached a record low, with approximately 3.5 million births, marking a 2% decrease from the previous year, according to the Centers for Disease Control and Prevention.
Other countries that have faced similar challenges with low birth rates are experimenting with baby bonuses as well. For instance, Quebec started giving newborn allowances in the late 1980s, offering 500 Canadian Dollars for the first child, $1,000 for the second, and around $8,000 for the third, based on the Department of Population Reference information.
Spain also introduced lump-sum allowances for new mothers in 2007 before discontinuing the practice in 2010. South Korea has launched various initiatives, including offering $2,250 for each newborn, in an effort to combat low fertility rates.
In 2019, Serbia began raising one-time payments to mothers for their first child, along with monthly payments for the second child for two years, and further incentives for families with more than three children. Hungary has also attempted to encourage population growth by providing interest-free loans that are forgiven after having three children.
However, while some of these policies have led to temporary increases in birth rates, none have successfully boosted the number of children families are choosing to have. What tends to happen is that couples who plan to have children simply decide to have them sooner.
Stuart Guierel Basten, a professor of social sciences and public policy, remarked, “Everyone says, ‘Yeah, I’m going to have a child because I need $5,000.’ It’s not mental or emotional arithmetic that goes into giving birth.”
The financial burden of childbirth can exceed $28,000, especially for those using out-of-network providers, according to Fair Health’s cost trackers. Caesarean births often have even higher expenses associated with them.
While many families don’t pay the entire bill upfront, they still end up spending thousands out of pocket. The rising costs of childcare in the U.S. further complicate matters.
Experts argue that while the proposed $5,000 bonus might cover some delivery costs or lost income during parental leave, it doesn’t adequately address the long-term financial responsibilities of raising children.
In 2022, median childcare expenses in the U.S. ranged from $6,552 to $15,600 annually, which equated to about 8.9% to 16% of household income, according to the Labor Department.
Moreover, experts highlight that cash bonuses don’t tackle the underlying issues contributing to lower birth rates in wealthier nations, such as an increased focus on education, career pursuits, environmental concerns, and shifting expectations regarding parenting.
A Pew Research Center survey indicated that at least 13% of childless adults cited concerns about raising children as a major reason for not having any, while 12% claimed financial constraints were a barrier.
Melissa Carney, an economics professor at the University of Maryland, pointed out the trade-offs many face between furthering their career and starting a family or adhering to a more intense parenting style with time constraints.
Many congressional Democrats have criticized the baby bonus proposal, advocating instead for enhancing the child tax credit. Representative Rosa Delauro remarked, “If you want to encourage families to have children seriously, you should focus on reducing costs and enhancing financial security for them.”
