SYDNEY, 19 June 2006 - Money might not buy love, but it can delay both life and death, according to two Australian economists.

An announcement in the government's May 2004 budget that a "Baby Bonus" of A$3,000 would be paid for each child born on or after July 1 that year saw more than 1,000 births delayed, the researchers say.

"We estimate that around 700 births were shifted from the last week of June 2004 into the first week of July 2004," said Australia National University economist Andrew Leigh.

"But more troublingly, we found that around 300 births were moved by more than two weeks."
Leigh said that using daily births data, he and Melbourne Business School economist Joshua Gans found that there were more births on 1 July 2004 than on any other date in the past 30 years.

The babies who had to wait around a while so their parents could cash in on their births were mostly delivered by ceasarean section or induction, Leigh said.

The two economists found similar blips in the data when they checked the death records of 1979, when the government abolished inheritance tax.

Rather than being taxed on up to 28 per cent of the value of their estate, a significant number of rich people put off drawing their final breath until July 1, when they were free to die untaxed, they said.

"Over half of those who would have paid inheritance tax in its last week of operation managed to avoid doing so," said Leigh and Gans.

There were "noticeably fewer deaths during the last week of June than in the first week of July," they said, estimating that about 50 wealthy people managed to cheat the taxman.

They concede that relatives of the dead may have fiddled the date of their loved ones' deaths to protect their inheritance, but say this is not the case in the births data.

"The share of births that were induced and/or delivered by ceasarean sections was particularly high in July 2004, said Gans. "This suggests that we're not merely observing misreporting of babies' birth dates - there was a real shift in births."