The White House is reportedly exploring giving women a “baby bonus” of $5,000 to encourage Americans to have more children—Newsweek has broken down how this might work.
Policy experts and advocates of boosting the birth rate have been meeting with White House aides to present proposals on how to increase the U.S. birth rate, The New York Times reported this week.
One idea is to give $5,000 in cash to every woman after they have given birth, according to The NYT.
The Context
The United States is one of many major economies that is facing population decline with more deaths than births, leaving lower numbers of working-age people to support larger groups of retired people.
America’s fertility rate is now projected to average 1.6 births per woman over the next three decades, according to the Congressional Budget Office’s latest forecast released in 2025—this is well below the level of 2.1 births required to maintain a stable population without immigration.
President Donald Trump’s administration has spoken out about this issue multiple times, with Vice President JD Vance saying on January 24, that he wanted “more babies” being born in the U.S.
Trump has signed an executive order expanding access to in vitro fertilization for Americans, and Transport Secretary Sean Duffy directed the Department of Transportation to give funding precedence to “communities with marriage and birth rates higher than the national average.”
Experts have different views about how to tackle this issue, with many calling for public health policies and financial plans to help families.
AP
How Baby Bonus Programs Operate in Other Countries
Several nations have tried to improve their birth and fertility rates with a direct cash payment given to new mothers—Newsweek has looked into how these worked logistically and whether they had any impact on birth rates.
Australia
Australia introduced a “baby bonus” initiative in 2002 as a refundable tax offset.
Parents could claim a tax break of up to 2,500 Australian dollars ($1,600) a year, each year for a maximum of five years—this number has since risen.
Parents had to make the claim within 12 months of the birth or adoption of a child—there is no cap on the number of children families could get money for.
Claims could be backdated to the birth or adoption of a child within a 12-month window.
However, the country’s crude birth rate has fallen since 2002, when it was 13 per 1,000 people, according to World Bank data, to 10.8 per 1,000 people in 2023, as reported by the Australian Bureau of Statistics.
Its fertility rate went from 1.75 children per woman in 2002 to 1.50 per woman in 2023. The highest rate this millennium was 2.02 in 2008.
Theodore D. Cosco, a research fellow at the Oxford Institute of Population Ageing, argued that Australia’s situation proves that these types of programs cannot be relied on in isolation.
“While a $5,000 baby bonus may temporarily increase birth rates by incentivizing parents to adjust their timing, evidence from countries such as Australia, South Korea, and Singapore suggests that such financial incentives alone have minimal lasting impact on overall birth rates,” he told Newsweek.
“These international examples demonstrate that baby bonuses tend to yield short-lived upticks rather than sustainable demographic changes,” he added, “Australia’s initial success faded quickly, while South Korea and Singapore continue to struggle despite ongoing incentives.”
Hungary
Hungary launched a similar program, an incentive loan, in 2019 as part of Prime Minister Viktor Orbán’s “Family Protection Action Plan.”
Instead of a tax break, the government gave zero-interest loans up to 10 million HUF ($28,000) to young married couples.
If just one child is born within five years, the loan is interest-free with a 0.5 percent “guarantee fee” to be paid annually to the government which then releases 30 percent of the actual debt after the second child and the entirety of the debt once a third child was born, financial outlet Ban360 reported at the time.
Banking expert and the founder of Ban360, Tamás Turmezey, praised the initiative for its impact on personal loans and mortgages, saying: “Without a doubt, the childbirth incentive loan has the most favorable conditions on the market.
“Even if the couple remains childless, the total interest to be paid back beats most of the personal loan rates. For most young couples, the childbirth incentive loan with the 20-year maximum term is a real alternative to mortgages.”
Hungary has more specific requirements for eligibility—for a couple to get the loan, they would have to be married with at least one of the spouses in their first marriage, the woman has to be between the ages of 18 and 40 and at least one spouse has to have at least three years of continuous social security contributions.
This is just one of several measures Hungary has taken to support families—others include mortgage deductions, exemption from personal income tax, and a child care allowance for grandparents.
Anne Goujon, Population and Just Societies program director at the International Institute for Applied Systems Analysis, said Hungary was an example of where government measures had shown early success.
“The evidence for a long-lasting impact of a financial baby bonus is far from conclusive,” she told Newsweek.
“There are many other contributing factors [to the reasons couples are not having children]—such as the availability of child care, paternal leave, employment and career considerations (especially for women), economic as well as other uncertainties (environmental, geopolitical), and increasingly individualistic values, among others,” she said.
“A closer example to us is Viktor Orbán’s Hungary, where such policies managed to raise fertility from its very low level of 1.2 in 2011 to 1.6 in 2021. However, since then, the trend has reversed, with the fertility rate falling to 1.38 in 2024.”
Do Baby Bonus Policies Boost Populations?
Poonam Muttreja, executive director of the Population Foundation of India, said that while “cash incentives like baby bonuses may offer a short-term nudge,” countries “which have sustained or moderately increased birth rates—like France or the Nordic nations—which have done so by investing in affordable child care, paid parental leave, gender-equal workplaces, and housing support.”
“These create an enabling environment where people feel secure in having children. Without addressing those systemic supports, a one-time bonus risks being symbolic rather than substantive,” she said. “Fertility decisions are shaped by long-term confidence, not one-off cash handouts.”
Elon Musk has praised Hungary’s approach several times, including it recently adding tax exemptions for mothers who have two or three children.
White House press secretary Karoline Leavitt previously told Newsweek: “President Trump is proudly implementing policies to uplift American families…the president wants America to be a country where all children can safely grow up and achieve the American dream.”
