Why Donald Trump’s ‘bucks for babies’ plan won’t work
Donald Trump is proposing a $5,000 “baby bonus” to reverse America’s plunging birthrates, but it’s an approach that has failed everywhere it’s been tried, says Eliza Filby
Elon Musk calls it a crisis more serious than climate change. US Vice President JD Vance warns of the “rejection of the American family”. Now Donald Trump is reportedly floating a $5,000 “baby bonus” to reverse America’s plummeting birthrates.
The urgency isn’t misplaced. Between 2007-2022, America’s birth rate dropped 20 per cent. Today, the average woman has just 1.6 children – a sharp fall from the Baby Boom era’s three-child average. Predictably, Trump’s plan has faced backlash. Critics argue the government should first fix America’s lack of paid family leave and affordable childcare. But that’s not why this cash scheme won’t work.
Financial incentives to boost birth rates have been tried worldwide – and mostly, they failed. Every wealthy country, bar Israel, now has a fertility rate below the 2.1 replacement level necessary. By 2050, China’s working-age population will shrink by 25 per cent. The UN forecasts Italy and Japan will lose over a third of their populations within 80 years.
Trump’s approach isn’t new. Italy and Greece have both dabbled in per-child payments while Russia has been testing these policies out since 2007 and now offer $7000 per child. Hungary forgives $30,000 marriage loans if couples have three children. Yet global experience shows cash bonuses fail to shift the dial. And it’s the same story with greater state provision. Austria stretched maternity leave to 2.5 years. Germany poured funds into childcare and parental leave. Taiwan has spent $3bn on family initiatives. Even the famously family-friendly Nordics haven’t reversed their fertility declines.
If anything, disincentives seem more powerful: US birth rates rose during the Vietnam War draft because men with children were exempt. Sending people to war isn’t exactly a viable strategy today. Besides, the bigger change is not war – it’s women.
Since the 1960s, birth rates have halved alongside gains in women’s rights, contraception, collapsing religious conformity and greater educational and professional opportunities. A win for progress – but one many modern pro-natalists, now frame as the root of the problem. Whether it’s Vance lambasting the “childless left” or the Chinese idea of “leftover women,”, the accusation is clear: women have traded babies for books and careers, abandoning traditional roles.
But this misses the real story. It’s not college-educated women driving the fertility collapse – their birth rates have stayed relatively stable. The sharpest declines are among working-class women, who are delaying motherhood much longer. In 1994, the average first-time mother without a degree in the US was 20; today, two-thirds of non-graduate women in their 20s are childless. This reflects not just education, but the collapse of stable working-class male employment and family structures.
From rite of passage to sacrifice of freedom
There’s also a broader cultural shift. Hyper-individualism means that across all classes, parenthood is seen less as a rite of passage and more as a sacrifice of personal freedom and financial security. Governments will struggle to persuade people who don’t want children to change their minds. Better to encourage those with one child to have another. Surveys show many Americans want more children than they have. In 2018, a quarter said they had or planned to have fewer than they wanted – with 64 per cent blaming childcare costs.
But the real issue isn’t just the expense of early parenthood. Yes, nursery fees are high, but the more systemic issue is stagnant wages and impossible housing costs which have redefined adulthood in the 21st century; towards greater dependency on parents and delaying having a family. Would-be parents now see children as a 30-year financial project, with the most expensive years coming after age 18. The rise of the “Hotel of Mum and Dad” – adult children stuck at home – hits working-class families hardest. Offspring were once a net gain to the household; now they are a net drain.
This has been brewing since the 1970s – long before Millennials or Gen Z could be blamed. But now rising life expectancy plus low birthrates have pushed demographics into crisis. We’re unlikely to ever return to the 1940s Baby Boom – that was a historical blip. Adulthood has been reshaped by self-expression, economic precarity, and extended dependency.
If governments really want to tackle falling birth rates, they must ditch quick fixes and start being honest about the new reality: a society with fewer babies, a disproportionate number of elderly, sluggish growth, longer working lives and higher immigration – and yes, a very different economic model.
Eliza Filby is the author of Inheritocracy: The Bank of Mum and Dad