The Hong Kong-based news site Asia Times has published an article praising the success of Hungary’s family support schemes.
In it, they write: ‘Academic demographers have shown that family-friendly government policies can mitigate or even reverse the fertility decline that has taken birthrates in the industrial world well below replacement. Infertility is notoriously resistant to public spending, but targeted spending—for example on childhood education and family housing—makes a difference’.
‘Hungary is one of the world’s few demographic success stories, and its Corvinus Institute for Advanced Studies last month hosted a seminar with prominent international researchers to review the fall of global fertility and consider remedies,’ the author continues.
‘Hungary is one of the world’s few demographic success stories’
When the incumbent, right-wing conservative Fidesz-KDNP coalition got into power in Hungary, in 2010, the national fertility rate was just 1.25 births per woman. It has been steadily declining for over a decade. In 1990, for example, it was as high as 1.87 births per woman. Fidesz was able to reverse that nefarious trend. By 2021, it grew to 1.61, which was actually above the EU average of 1.53 births per woman for the year.
The Orbán administration has implemented policies such as CSOK, a homeownership subsidy programme for couples with children in 2015. They introduced its revamped version, CSOK Plusz, in 2023. Women under the age of 30 who have had at least one child get to pay reduced income tax; while mothers with four children or more are exempt from national income tax altogether. The government are also issuing so-called ‘baby bonds,’ low-value treasury bonds for 42,500 HUF ($108) with 19-year maturities and compounding interest for each child born. After the bond matures, the accumulated money gets released to the 19-year-old child’s bank account.
‘Western European countries see mass migration as the solution to their pressing demographic problems’
This approach is in contrast to that of the leaders of some Western European countries, who see mass migration as the solution to their pressing demographic problems.
The article by Asia Times, however, goes on to point out in their analysis that:
‘There is no simple correlation between total public spending on family benefits and the total fertility rate among the members of the high-income club, the Organization for Economic Cooperation and Development. Nonetheless, countries with higher fertility mostly spend more to support families, and countries with lower fertility tend to spend less’.
The author also goes on to cite a lecture that American Nobel laureate economist James Heckman has given at Corvinus University in Budapest, Hungary. In it, he named ‘the costs of higher education and career aspirations delaying or discouraging parenthood, shifting social norms reflecting parenthood as a personal choice rather than a societal expectation, economic challenges such as housing costs and job insecurity, cultural and media influences, and environmental concerns like climate change’ as the five main factors behind the declining fertility rates in Western countries. He then highlighted that government spending on early childhood education usually boosts the participation of women in the workforce and raises the overall fertility rate.
The lack of affordable housing for young adults also decreases a country's fertility rate, Heckman also pointed out. The countries of South Korea, Italy, Greece, Spain, Portugal, and Poland, where the highest proportion of young adults live with their parents, also have the lowest fertility rate. So, the Hungarian CSOK programme helping young adults with homeownership is a strategically sound move.
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