The government of France has announced that it will substantially increase public spending on child care and parental allowances in an effort to encourage women to have more babies. The expenditures are particularly directed toward mothers who have three or more children:

The new measures include extra tax credits for childcare, 15,000 new creche places and more government money for mothers who take time off work to have their third child: a parental leave allowance of 750 euros (£509) a month for one year, though mothers can opt to claim the old benefit of 512 euros (£347) a month for three years instead.

The new, higher allowance is aimed at getting women back to work sooner.

Prime Minister Dominique de Villepin discussed the new policies at a conference on the family. Although the family has "changed", he said, it

"remains at the very heart of French society. It is a source of joy, of comfort, and a haven for its members. That is why we are announcing measures to help families in their everyday lives."

If the family is so important to France and such a great source of joy and comfort, why not encourage mothers to stay at home and raise their newborns instead of hustling them back to work ASAP?

If Québec's experience is any indication, this program will be extremely expensive and meet with limited succcess. In 1988, the government of the province of Québec introduced the Allowance for Newborn Children (ANC) which paid mothers for having children. By 1992, the program paid $500 for the first child, $1000 for the second, and $8000 for the third and subsequent children. Moreover, these payments were entirely free of provincial and federal income tax. (The program was cancelled in 1997.)

The C.D. Howe Institute, an independent Canadian economic research organisation, assessed the effectiveness of the program in a 2002 study and found that ANC did indeed increase the number of births above what it would have been without the program. However, the increase was found to be very small: less than 15% of births in Québec could be attributed to the ANC. But because ANC paid an allowance for all children born in the province, the cost per additional birth was estimated to be over $15,000.

Does France have the money for such a program? This question is already being asked.

Some in France wonder where the funds for these generous benefits will come from; the nation is already over the European limit on public spending.

The EU has a "limit" on public spending? One wonders what sanctions are to applied to violators. Order the government to shut down until the end of the fiscal year? Here's a radical idea: Let the voters decide how much the government should spend. But I digress.

via The Reform Club.