What can a government do to encourage more babies?

Marcus Roberts
October 24, 2019
Reproduced with Permission
Demography is Destiny

Over at Unherd, Dr Paul Morland (author of the book the Human Tide: How Population Shaped the Modern World which we discussed here) has recently analysed the Hungarian government's attempts to encourage families to have more babies.

For the past 60 years or so the Hungarian people have not been having enough babies to replace themselves naturally. Since the early 1980s the population of Hungary has fallen by about a tenth (one million people) due to low birth rates and migration. Then in the 1990s the total fertility rate of the country slid to the very low level of under 1.5 children per woman. At times in the years since it has seen its TFR plunge below 1.3. The impacts of this very low fertility rate have yet to be fully felt within the demographic structure of the country. There will be fewer child-bearing Hungarian women in the next generation and that will continue to have knock-on effects well into this century. Due to lengthening life expectancy, the median age of a Hungarian is in the mid-40s, which means that the country is nearing the super-old societies of Italy, Germany and Japan.

All of this bad demographic data has had an impact on the country's economy which, despite having its best growth figures for more than a decade, is crying out for workers. The most acute shortage is in IT professionals, but there is an overall shortage of about 100,000 workers in the labour market overall.

It is therefore perhaps not surprising that the Orban government has seen Hungary's demographic decline as a serious challenge. It has introduced a wide range of policies to try and encourage people to have more children. These have included increased parental leave and the provision of creches. It is still too soon to tell whether this will have much impact on fertility rates longterm but it does seem as if there has been an uptick of about 0.25 children per woman. This is of course nowhere near enough to get the Hungarian TFR even to replacement rates and may be just due to the ending of the delay in childbearing (known as "tempo") by women – a limited rebound in fertility rates happens after the TFR has been artificially depressed by the delay. Finally the rise does not seem to be coming from extra third children in Hungarian families, and this is where government policies have been focussed. So perhaps the rebound is not really due to governmental policies at all or perhaps, just like in Poland, governmental measures are helpful, but not the silver bullet.

If it is true that 1.6 to 1.7 children per woman is becoming the new (below-replacement rate) normal then there may be more pressure upon governments to do something to lift the fertility rate, especially if the low number of babies has an effect on the public finances. Attempts by Hungary's government to do something about low birth rates will provide good data for other countries following in its footsteps. Perhaps however the new normal will prove harder to lift than it was to sink to.