Quebec's Baby Bonus: Can Public Policy Raise Fertility?

In 1988, Quebec introduced the Allowance for Newborn Children, a pro-natalist child benefit that paid up to $8,000 to a family after the birth of a child. Was the program successful? It achieved its goal of increasing family size, but only at a high cost per additional birth. Each child who would not have been born in the absence of the incentive cost the public purse more than $15,000. The main policy lesson from this episode is that, even if the response to an incentive policy is strong, the effective cost per desired result may be very high.