Monday, May 22, 2006

Putin Should Read Freakonomics

Or, at the very least, research whether or not anyone else had tried this idea:

Cash for babies is the Kremlin's offer to women in its latest bid to reverse a population decline that threatens to leave large swaths of Russia virtually uninhabited within 50 years.

President Vladimir Putin last week defined the crisis as Russia's most acute problem, and promised to spend some of the country's oil profits on efforts to relieve it. He ordered parliament to more than double monthly child support payments to 1,500 rubles (about $55) and added that women who choose to have a second baby will receive 250,000 rubles ($9,200), a staggering sum in a country where average monthly incomes hover close to $330.

If Levitt’s research holds up (which I think it will) Russia will see an increase in crime in, say, about 18-20 years. From what I’ve heard about Russia, I would think that the last thing they want right now is an increase in crime.

The easiest way to fix a population decline is to attract immigrants. Of course that would mean that Putin would need to reverse his turn towards authoritarianism and begin some drastic market reforms.

I guess introducing a problem that won't be seen (and probably not correlated correctly) and make people love you by giving them mad amounts of money is probably an easier decision to make for you local despot.

HatTip:/ ElectEcon

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