Last week, the Czech Senate approved an increase in the parental allowance to 350,000 crowns. However, the increase of 50,000 applies only to families whose child is born after January 1, 2024. If the newborn is “unlucky” and comes into the world even a second early, his family will lose this bonus.
It can be expected that mothers will move the date of birth of their children to a more financially favorable date. A skeptic will probably make two objections: that such a thing is physiologically impossible, and moreover, who would drag out a pregnancy for the sake of a few thousand. But in most developed countries, a relatively significant part of births is artificially induced – induction of labor or caesarean sections are planned, and there is thus the possibility of setting them within a certain time window.
Even in the Czech Republic, roughly a fifth of births are performed by caesarean section, so there is certainly room for manipulation of the date of birth. This is also evidenced by the fact that fewer babies are generally born on weekends – when maternity hospitals are naturally less staffed. Obstetricians – just like anyone else – want to relax on the weekend. Some studies show that sometimes other motives also prevail – for example, before important international obstetric conferences, the birth rate also increases. Apparently, the participants do not want to complicate the work trip and prefer to deliver their patients in advance. In general, doctors do not completely reject the timing of births.
Now to the financial motivation of parents. When Germany introduced income-related parental allowance from 1 January 2007, around 1,000 births were postponed between December 2006 and January 2007. This shift mainly concerned working mothers, who gained the most from the reform. Similar reactions in the timing of births have been found in other countries. Whenever the benefits associated with childbirth changed sharply for certain dates, and even when mothers were already pregnant, births followed at a time when they paid more. For example, as of 1 July 2004, more than 1,000 births in Australia had moved from June to July of that year as a result of the introduction of maternity pay. Conversely, the abolition of the €2,500 maternity benefit per child in Spain led to a shift of more than 2,000 births from January 2011 to December 2010.
A similar phenomenon occurred in our country, when the maternity allowance was doubled from April 1, 2006, which was announced in the fall of the previous year, and mothers were already expecting. My colleague Marcel Tkáčik and I found out that between 100 and 244 births were moved from the end of March to the first week of April. And most children were born directly on April Fool’s Day.
The timing of births is accompanied by criticism that only medical reasons should decide the date of birth, not financial ones. Prolonging pregnancy can lead to higher birth weight or complications during delivery. Although these risks exist, most studies conclude that newborns are not in great danger. Still, a caring government should not bring unnecessary stress to such a blessed event for expectant mothers, whether they will qualify for the higher dose or not, and motivate them to over-strategize about the date of delivery.
If the government coalition wants to make people speculate about the timing of important life moments, there is one “opportunity” here. After all, people may be optimizing income even with their death.
After all, one of the headlines in the New York Times on January 15, 2000 was the 51 percent increase in deaths in the first week of January compared to the last week of the previous year. The only plausible explanation left was that people wanted so much to live to see the year with a two at the beginning that they succeeded and then fell asleep. This event is said to have inspired Wojciech Kopczuk and Joel Slemrod, American economists, to famously research whether the announced decline in taxes – especially inheritance taxes – motivates would-be deceased to live through a more tax-optimal period. They didn’t find an overwhelming effect, but the data from the US does suggest that when taxes go down, those who die want to leave larger inheritances and live to see lower taxes.
If the government intends to follow through on its program to reduce the tax burden, it can also contribute to increasing the life expectancy of our population.