While the United Nations celebrated the 8 billion population milestone in November of 2022, it remains an open question whether humanity will sooner reach 9 billion or return to 7 billion. The 1963 global average of 5.3 births per woman has declined to 2.3 in 2023. In North America, that number is 1.6, and in Europe it is 1.3. These plummeting birthrates are an unprecedented public policy challenge facing nations. While concern over it is has been largely limited in policy discourse, this decline has vast social and economic implications that touch every facet of society. A declining birthrate poses significant challenges for national defense capability, economic growth, the basic ability of nations to look after their aging populations, and is evidence of what a society values.
Most Western pension systems, for example, were designed with sustainability calculations on worker-to-retiree ratios that simply do not exist today. Over 50 years, Canada’s worker to retiree ratio has gradually declined from 7-to-1 to a forecast 3-to-1 by 2027. The situation in the United States is more dramatic, moving from 42 workers per one retiree in 1940 to 3-to-1 today, on track to decline to 2-to-1 by 2050. For many countries these problems are further complicated by untenably large national debts, rapidly growing debt interest payments, and aging populations wherein pension payments will soon outpace worker contributions.
The issue of population decline has received limited attention in policy discourse, with notable exceptions such as Darrell Bricker and John Ibbitson’s 2019 book, Empty Planet. In their work, they argue convincingly that population decline poses an imminent and significant demographic challenge to humanity. One of their primary solutions is for Western nations to substantially increase immigration to offset declining domestic birthrates.
While Bricker and Ibbitson acknowledge that immigration merely redistributes the global population rather than reversing overall declines, they present it as a viable solution for countries like their own, Canada. However, recent examples from Canada and other Western nations suggest that increasing immigration is neither politically popular nor practically feasible. Evidence points to significant externalities, including strained public services, skyrocketing housing costs, and wage suppression caused by increased competition with native-born workers.
‘Recent examples from Canada and other Western nations suggest that increasing immigration is neither politically popular nor practically feasible’
In Canada, Prime Minister Justin Trudeau’s aggressive immigration policies have eroded the previously strong pro-immigration consensus. Faced with mounting public opposition, Trudeau has been forced to announce reductions in immigration targets. This development underscores that immigration is not a sustainable or politically viable long-term solution to address population decline.
Hungary and France provide two examples of what addressing this problem could look like. Other nations should look to their examples in approaching solutions. Hungary’s pro-family push is a rare example of a Western government trying to address the declining birthrate challenge head-on, not only through economic incentives but through pursuing a whole-of-society shift on attitudes towards families. In response to a steady erosion in birthrate since 1980, Viktor Orbán’s Fidesz government made family policy a national priority after returning to government in 2010. Though early, there are promising indicators: a government estimate of 120,000 additional children being born since the policy shift, as well as the doubling of marriages since 2010, and a 41 per cent decline in the national abortion rate.
Relative to other countries, Hungary’s spending on family policy moved from one of the lowest in Europe to one of the highest on a per GDP basis. The expansive policy suite includes family housing loans guaranteed by the state (a maximum 3 per cent interest rate), interest free loans for couples expecting children, reductions in mortgage loans for expectant couples, generous tax exemptions including a personal income tax exemption for young mothers, amongst others. There are over 30 such policy mechanisms available to benefit Hungarian families right now.
The French Example
Elsewhere, tax-based solutions like in France can help resolve the economic hesitation that often discourages young couples from having children, though economic incentives alone are not a full answer to plummeting birthrate policy challenge. Earlier this year, French president Emmanuel Macron called for ‘demographic rearmament’ and unveiled an early outline for a plan to fight the nation’s declining birthrate.
As one of us has previously argued, France’s quotient system is worth examination as well as a tax policy-based solution. The French Republic offers tax relief to families based on the number of dependents in their household. It calculates this by dividing the household’s total taxable income by the number of adults and dependent children. It’s a system that offers an effective tax benefit to larger families. The calculation works like this: each adult represents one part, while each child contributes a fraction of a part. The first two children each count as a half part, and any additional children count as one full part. The taxable income is divided by the total number of parts, and tax rates are applied to this amount. The total tax is determined by multiplying the tax per part by the number of parts. The French treat families as the economic units that they are, rather than each adult as an atomized individual taxpayer. It is simple and provides progressive tax relief for larger families, while ensuring that children provide an inherent value to society through which we all benefit from. This recognition is as much a cultural signal as an economic one, which identifies cultural changes being necessary conditions to improving birthrates.
Supporting Marriages
Hungary’s family policy agenda is not without its critics. Its detractors to date have focused on the stubborn lack of improvement in the country’s overall birthrate, as a column earlier this year in the London-based Financial Times did. Yet in an era of instant clicks and commentary it is perhaps confounding to think of a public policy where results are measured across generations. But where evidence is available, there are promising signs. Hungary has bucked the Western trend of collapsing marriage rates, an extremely positive indicator for family formation. This is likely attributable to Hungary’s direct state financial support for newlyweds starting out.
Since a low 3.6 marriages per 1,000 inhabitants in 2010, Hungary sharply increased to 5.2 by 2017. By comparison, the European average remained unchanged at 4.4 in the same timeframe.[1]
Research consistently shows that marriage rates are a key indicator of birthrates. It is perhaps not a surprise that the steep decline in human fertility was exacerbated in large measure by the liberalization of divorce and post-1960s social norms that increasingly embrace cohabitation and so-called hookup culture across the west. Research from the U.S.-based Institute for Family Studies notes that the fertility rate among married couples has remained largely consistent since 1980. In addition to marriage rates as a bellwether for fertility rates, there is a direct correlation between strengthened marriage and reduced child poverty.
‘Hungary has bucked the Western trend of collapsing marriage rates, an extremely positive indicator for family formation’
Strong marriages have expansive benefits both to individuals and broader communities. Cardus, one of Canada’s leading think tanks, undertook a review of over 50 empirical studies exploring the link between marital status and health. The vast majority documented in the Cardus study suggest that married individuals tend to be happier, healthier, and have longer lifespans compared to those who are unmarried. It is clear from the connection between marriage and family formation that culture is at the heart of the challenge in reversing the trend in birthrates.
Communities do not benefit from perpetually transitory professionals who work between multiple locales but have minimal binding attachment to any single community. This is an example of the somewhere versus anywhere distinction that political scientist Matthew Goodwin coined in his book The Road to Somewhere that identifies much of the roots of the global populist movement. The recently kindling interest in marriage and family policy amongst global conservative parties and organizations is a policy shift to be encouraged and is a positive example of a policy response to populist concerns. As the late English philosopher Roger Scruton observed, conservatism as a philosophy is inherently local. He noted that it is rooted in ‘settlement—the motive in human beings that binds them to the place, the customs, the history and the people that are theirs.’[2]
Family-Centric Thinking
One factor that distinguishes Hungary’s family policy agenda is its framing as a matter for all of society. Former President Katalin Novák, an advocate for pro-family policies on the global stage, remarked that encouraging young couples to have more children is not merely an economic issue but a question of fostering ‘family-centric thinking’. This perspective reflects not a novel approach to the significance of families in society and birthrates but rather a return to more traditional conservative values. Robert Nisbet writing in the 1950s said, ‘as long as the family had institutional importance in society, it tended to maintain moral and psychological devotions which resulted in higher birthrates’.[3]
The family-centric priority of the Hungarian government is visible if you drive into the country from any of the neighboring nations. Enter Hungary from Croatia for example, and you will be greeted with welcome signage from ‘Family Friendly Hungary’ and welcoming you in Hungarian, Croatian, and English.
Poland’s GDP per capita has more than tripled since 1990, an increase of 235 per cent between 1990 and 2022, a testament to the economic freedom and opportunity allowed by the end of the communist era. In Asia, South Korea has equally impressive GDP per capita growth along the same time frame, a 260 per cent increase between 1990 and 2022.[4] Yet material growth did not these nations dodge the global trend of declining birthrates, as Poland (1.3) and South Korea (0.7) remain well below both global and regional averages.
‘Encouraging young couples to have more children is not merely an economic issue but a question of fostering “family-centric thinking”’
For almost any nation today, addressing the contemporary birthrate challenge necessitates a fundamental transformation of societal and, we would argue, cultural thinking out of the shadows of the twentieth century. In the East, the communist worldview largely rejected the nuclear family unit, seeing it rather as an economic unit that ideologically furthered capitalist interests. In the West, a notion emerged in the latter twentieth century that largely views prioritizing family as limiting individual autonomy and self-fulfillment. We are the inheritors of societies that have been profoundly shaped by one or both worldviews. Today’s reality is the culmination of several long decades and thus it is naïve to think we can shift societal thinking in mere years or strictly via public policy. This is why today’s criticisms of Hungary’s family policy are likely premature.
Fully shifting a national mindset after decades is no small undertaking, as other governments have found. Facing its own rapid demographic plunge, the People’s Republic of China is today attempting its own reversal of its longstanding small family policy. After decades of vigorously enforcing the infamous one-child only policy that began in the Deng Xiaoping era, the Chinese government shifted to a three child policy.[16] Finding that a shift in policy does not shift a culture ingrained over several decades, the Chinese government under Xi Jinping and Finance Minister Lan Foan is now reportedly considering a monthly 800 yuan subsidy to support parents having second and third children.
Birthrates are declining rapidly across the globe, ushering in a period of radical depopulation that will have profound consequences for societies. It is imperative for policymakers to address this challenge. While public policy plays a crucial role in valuing families, it alone cannot solve the problem. Furthermore, mass immigration from the developing world to developed nations is increasingly being rejected by citizens, both politically and culturally.
A key part of addressing this challenge is shifting long-held societal attitudes that undervalue families. Societies must move away from viewing children and families as sacrifices or obstacles to individual autonomy and instead recognize them as the foundation of strong, stable, and thriving communities. Hungary’s leadership in promoting family-centric thinking offers a potential roadmap for other nations to consider in developing their own approaches. Let us hope they follow suit.
Peter Csillag is Vice President of one of Canada’s leading government relations firms and served as an advisor to Canadian elected officials at the federal and provincial levels. Provincially, he previously served as a senior advisor to conservative parties in Alberta and British Columbia. Federally, he served in the Minister’s office at National Defence, Employment and Social Development, and Citizenship and Immigration. Born in Hungary, he lives in western Canada with his wife and five children.
Samuel Duncan is Vice President of one of Canada’s leading government relations firms. He worked previously as Executive Director of Policy to the Premier of Ontario, where he was responsible for leading the government’s strategic policy development and implementation process. Sam has also served as a senior advisor to the Prime Minister of Canada and several federal Cabinet Ministers. He lives in Toronto with his wife and four children.
[1] Crude marriage rate (OWID based on UN, OECD, Eurostat and other sources), processed by Our World in Data. ‘Crude marriage rate (per 1,000 inhabitants)’ [original data].
[2] Roger Scruton, Conservatism: An Invitation to the Great Tradition, St Martin’s Publishing Group, 2018, 2.
[3] R A Nisbet, The quest for community: A study in the ethics of order and freedom, Oxford University Press, 1953, 60.
[4] ‘Data Page: GDP per capita’, In: Max Roser, Pablo Arriagada, Joe Hasell, Hannah Ritchie, Esteban Ortiz-Ospina, Economic Growth, 2023. Data adapted from World Bank. Retrieved from: https://ourworldindata.org/grapher/gdp-per-capita-worldbank
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