Hungary's incentives mean more marriages but not more babies

Hungary's incentives mean more marriages but not more babies

A family in Budapest. Yuriy Scmidt/Shutterstock
A family in Budapest. Yuriy Scmidt/Shutterstock

.- Hungary has seen a surge in marriages in 2019 following the introduction of government incentives for couples to marry and have children, but the reforms have yet to deliver a boost to the country’s plummeting birth rates.

Hungarian Prime Minister Viktor Orban and his administration have offered several financial incentives for couples in the country to marry and have children, including subsidized loans to those who marry before the bride’s 41st birthday.

Incentives to have children are built into the loan. One-third of it can be forgiven if the married couple has two children, and the entire loan can be forgiven if they have three children.

Hungary claims the policy is working—its central statistics office recently reported a 20% increase in marriages in the first nine months of 2019, compared to the same nine-month period of 2018, according to Reuters.

The country’s birth rate remains well below the replacement level of 2.1 births per woman, and the rate has not yet registered an increase in 2019. The number of births in the first three quarters of 2019—January through September—fell by 1.6% from 2018, the office also reported, with an estimated total fertility rate of 1.48 births per woman.

Katalin Novak, the country’s state secretary for family and youth affairs, tweeted on Monday that “marriage is seeing a renaissance in Hungary” due to the administration’s “pro-family policies.” These policies include high rate of government expenditures per family, and housing and automobile assistance for families, she said.

Prime Minister Orban openly addressed the country’s decades-long birth decline in a recent address, and outlined the long-term goal of reversing the trend and reaching the replacement level.

In his Nov. 14 speech at the 9th meeting of the Hungarian Diaspora Council, Orban noted that “we won’t achieve it in the short term, and perhaps only in ten years at the soonest,” referring to the replacement rate.

Orban emphasized the need to stay the course, and continue the government’s “family action plan”—of which there will be an expansion next year, he said.

In many other Western countries birth rates sit below the replacement rate of 2.1 births per woman. The U.S. Centers for Disease Control (CDC) last week reported that the number of recorded births in the U.S. fell by 2% from 2017 to 2018, and birth rates declined across age ranges from 15 to 44.

Provisional CDC numbers released in May showed the U.S. fertility rate in 2018 at its lowest level recorded, having fallen every year save one since 2007.

The causes behind the decline in births in the Western world, however, are not so clear.

Earlier this year, CNA spoke with two experts who have studied demographic trends, the causes, and possible solutions to demographic declines. Both highlighted the complex causes of low fertility rates and warned against placing too much hope in financial incentives from the state.

Johnathan V. Last, author of the book “What to Expect When No One Is Expecting,” told CNA that state financial incentives to have children have been tried in countries throughout the world without much success. He cited the example of Singapore “where the government basically offered $20,000 for people to have a kid.” According to Singapore’s Department of Statistics, the total fertility rate in 2018 was just 1.14 births per woman in child-bearing age.

“The bottom line is that having a child is a heavy lift, and no policy is going to make up someone’s mind to do it,” Last told CNA.

The causes of low birth rates for young women tend to be more cultural than a product of rational economic thinking, Dr. Catherine Pakaluk, assistant professor of social research and economic thought at the Catholic University of America, said.

“My read is that if you talk to women in their early 20s, you will get a response that sound very conscious and deliberate. But the choices that ‘make sense’ to people seem to be highly informed by something in the [cultural] water,” Pakaluk told CNA.

Tags: Fertility, Hungary, Birth rate, Victor Orban