Australian Shepherds can be very good with children if they have been raised with children or occasionally even if they have not. You will need to teach the child to respect the dog, and the dog to respect the child. The baby may want to pull a dog’s ears, and your dog should be acclimated to tugs of this sort, even if you do not have children. Do not allow the child to chase or tease the dog. The parent, not the child, should be responsible for teaching the puppy and correcting him if he gets too rough. Dogs tend to see children as siblings rather than leaders, and the dog should never be allowed a higher position than the child.
Will Aussies herd your children? No. They may try to nip at running children’s heels as puppies because they are responding to their natural inclinations as herding dogs. Just ask the child to stop and tell the dog “no” and do not move until the puppy calms down. Some dogs do not grow out of this tendency and must be carefully watched.