Child health and parental responses to an unconditional cash transfer at birth

We estimate the impact on child health of the unanticipated introduction of the Australian Baby Bonus, a $3,000 one-off unconditional cash transfer at birth. Using regression discontinuity methods and linked administrative data from South Australia, we find that treated babies had fewer preventable, acute, and urgent hospital presentations - medical care available without co-payments - in the first two years of life. The payment later increased demand for elective care, which requires planning, medical referrals, and often co-payments. Our effects are strongest for disadvantaged families. Our findings suggest that up to 34% of the payout were recouped within the first year.