The usual suspects denounced it as patriarchy and the oppression of women when the Trump administration suggested it, but Democrats in Michigan have quietly embraced the idea anyway — and it looks like it’s working.
Behold the Baby Bonus, the policy that will soon take center stage in Washington and in state capitals.
A Baby Bonus is a cash payment to parents right before or after the birth of a new child. It is pretty well proven to improve babies’ health, and new research bolsters the suspicion that it can actually encourage people to have more babies — and we desperately need more babies.
Launched in 2024, “Rx Kids” is a public-private program that gives mothers $1,500 when they are halfway through their pregnancy, and then pays out $500 a month for 12 months. This isn’t a tax credit or a childcare subsidy. It’s straight cash to the parents right when they have a baby, for a total of $7,500 by the baby’s first birthday.
The money comes from a consortium of foundations, universities, the state’s welfare budget, and a children’s hospital.
Flint, Michigan, still infamous for having toxic drinking water a decade ago, was the setting for the first experiment in this Baby Bonus. After Flint, the program spread to Kalamazoo and Pontiac.
Because this program rolled out in only a few places, it created something of an experiment: Did this money make a difference?
Yes. It was a small difference, but it was real. Researchers Jonathan Hartley and Benjamin Jaros found that births were 7.5% higher than they would have been absent the subsidy.
Maybe people are just moving to Flint or Kalamazoo to get the bonus, but the authors found data to undermine that explanation. They looked at surrounding counties and found no decrease in the birth rates there, which you would have found had expectant parents flocked to the Baby Bonus counties.
Now, the increase was pretty small by some measures. For every 14 mothers, babies whose parents got the Baby Bonus, 13 of them would have been born anyway. That is, about 1,000 babies were born in Flint in 2024, and about 925 of those births would have happened anyway.
The program sent $8 million to new mothers in Flint, with most of that going to mothers who would have had babies. So as a pro-natal subsidy, this was pretty expensive: about $107,000 for each extra baby.
Pronatalists have a few reactions to this.
First: It’s amazing if one policy can increase the number of births by 7%! Let’s find two more policies like that, and we’ve reversed 15 years of falling birthrates!
Also, just as falling birthrates are a self-reinforcing problem, rising birthrates might be a self-reinforcing solution. If so, anything that can nudge the birthrate up is good. The question is whether this is an affordable or cost-effective way to get more babies.
It’s true that the Baby Bust wasn’t mostly caused by economics, but by culture. Thus, the solutions will be found more in cultural shifts than in policies or economic changes.
But if we’re going to spend money to help young adults have children, the Baby Bonus seems the most promising approach, for a few reasons.
First, it’s immediate. Parents get the first check right before the baby is born, and then the rest of the money comes in the child’s first months. This has a bigger psychological effect on parents than a child tax credit, which doesn’t show up until the child’s second tax year, and which is dribbled in over 17 years.
More importantly, the baby’s first years and months are when parents most need the money. That’s when Mom is mostly likely to take time off from work. That’s when daycare costs might be highest.
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On that note, a Baby Bonus is much more flexible than other spending proposals, such as subsidized childcare. A parent can use the Baby Bonus for childcare to go back to work, a babysitter for the older kids, or to cover income loss from time off work. A couple could also use a Baby Bonus to offset some of the cost of moving, building a granny flat, or adding a wall to build a nursery.
The Michigan study gives us a small sample size, and so maybe a Baby Bonus won’t be the winner it looks like. But so far, it seems that if you give people money for having a baby, some people will have more babies.