Australia has seen a spurt in the birth rate in what appears to be in answer to the former treasurer's Peter Costello's exhortation for Australian couples to have another child "for the country".

From the mid 1990's Australia's birth rate had been stagnant showing between 255,000 and 260,000 babies born every year. In 2004, the then treasurer Peter Costello introduced the $3000 Baby Bonus payment and research has shown the birth rate in NSW for women having their third or subsequent child rising significantly across all sectors of society.

A study by researchers at the University of Sydney at Royal North Shore Hospital was undertaken to determine its impact, and the researchers analysed all births to women aged 15 to 44 years in NSW from 1997 to 2006..

In 2005 the birth rate climbed to 272,000, and the greatest increase was seen in well-off-women in the age group of 25 to 29 years living in metropolitan areas. In 2006 it went up to 282,000 births taking in both babies naturally conceived and through in-vitro fertilisation (IVF).

The researchers in the Medical Journal of Australia (MJA) said, "Whether it has encouraged couples to increase their family size or just change the timing of a birth is yet to be seen. But the results of this social experiment suggest that financial incentives do affect birth rates."

The study found a trend that was worrying in teenagers showing an increase in the number of births as well. The biggest increase in 2005 and 2006 was seen in the age group of 15 to 19 years. It seemed that the financial incentive resulted in about 40 extra teenage births a year.

Samantha Lain, lead researcher said, "As pregnancy and childbirth in teenagers are associated with adverse perinatal outcomes the increase in births to teenagers after the introduction of the Baby Bonus is of concern."

Since 1997 teenage motherhood had registered a steep decline of an average of 125 births a year. The researchers said, "As pregnancy and childbirth in teenagers are associated with adverse ... outcomes, the increase in births after the introduction of the baby bonus is of concern. And (it) follows a steep decline in teenage birth rates in the years before 2004."

The changes in birth rate after the baby bonus that the researchers noted were that women who showed a "significant increase in first births" were teenagers of average socio-economic status, but also those in rural areas in their teens or early 20s, and "average or advantaged" women aged 30-44 who lived in city areas.

They also noted that in the case of women who already had one child and then had a second after the baby bonus, it was "predominantly among younger women of low and average socio-economic status" while the third or subsequent birth was seen across all ages.

The authors reported that they "did not find ... the increase in births only occurred in low socio-economic or disadvantaged groups".

The researchers concluded by saying that while other factors may have been at play, it was "unlikely" that a short-term change of such magnitude was not related to the new payment.