Factors influencing childbearing – The link between financial considerations in families and childbearing


ZITA BOKÁNYI
Senior Research Fellow

   

NIKOLETT SIMON
Research Fellow


The two most important factors affecting the demographics of Hungary are the low and declining birth rate and the aging population. Since 1981, the population of Hungary has been steadily aging and getting smaller. Whether a person has reached certain stages in their life – or returned to those stages – is generally a decisive limiting factor on whether they choose to have children, and these stages are generally influenced by financial factors. With young people taking longer to live independently of their parents and joining the job market later than before, household income can have a significant influence on people’s willingness to have children. The various forms of child support, which have been given a major priority in the family policy of the Hungarian government in recent years, can play a crucial role in ensuring the desired number of children are born.

In 2011, the number of live births reached a historical low in Hungary, with 88,000 babies born. While the birth rate has fluctuated since this low point, there has generally been an upward trend. 91,577 children were born in 2017, though this figure was down 1,500 on the previous year.


Live birth rate 2007-2017

Source: Collected by Századvég Foundation based on Hungarian Central Statistical Office (KSH) data


There are a range of factors connected to the reduction in the birth rate. This phenomenon is explained in part by a fall in the number of women of child-bearing age, while material circumstances and difficulties for women in returning to work also have a significant impact on people’s decision to have children or not.

The proportion of expenditure in Hungary earmarked for family policies is relatively high in relation to other European countries. The government has doubled the amount of support provided in this area, and it is now equivalent to 4.9% of GDP. As part of its family policy, the government strives to provide material support for young married couples, people who are planning to become homeowners and have children, women returning to work after giving birth, large families and the elderly. The support system places significant emphasis on families with young children. The three forms of support (CSED, GYED, GYES[1]) provided in the first three years after the birth of a child offer further support for families. While this support is provided for parents who stay at home to bring up their children, the introduction of the ‘GYED extra’ additional childcare allowance has seen a greater focus on providing assistance for working people with young children in recent years. This particular measure is one of the most significant in general family policy in recent years, as it makes it possible for the parent to take on work with no restrictions once their child has passed six months of age, while they are still eligible for child support or child support services. In 2016, approximately 70,000 people took advantage of the GYED extra family support format.

The family support system has also been further adjusted for working parents through such initiatives as the workplace action program. Relief has also been provided for job creators, with employers able to benefit from a tax allowance if they have new mothers working in their company.

Apart from financial security, a lack of suitable living arrangements is thought to be another reason that many young people decide to put off having children. This assumption has been supported by the Századvég Foundation’s own study. The research has shown that young people see finding suitable accommodation as the most significant issue, though there has been a significant fall in the number of people who share this concern since the introduction of the Family Housing Support Program (CSOK). This program helps create favorable circumstances for starting a family and raising children, encouraging people to have children while also boosting the housing market and subsequently the economy. The CSOK program is being continually developed and expanded. According to the government’s forecasts, HUF 242 billion will be allocated to housing support in 2019. While most of this will go towards supporting middle-class families, the family allowance also provides support for low income earners. In 2017, more than 1 million families received the family allowance. Family policy measures can serve as an incentive for people to have children, and both the CSOK program and family allowance can help stimulate the birth rate. In 2017, more than 29,000 people took advantage of the Family Housing Support Program, benefiting from total support of HUF 70 billion.

Since 2010, the government’s family policy has led to a 20% increase in the fertility rate, with the current figure standing at 1.5 children per woman[2]. This figure would need to reach 2.1 to help maintain the current population in the medium-term, as this would be sufficient to ‘replace’ each of the two parents. While it is clear that the current figure is some way short of the desired level, family-friendly policies have undoubtedly helped contribute to a visible upward trend in recent years.

 

[1] Infant Care Allowance, Childcare Support, Childcare Allowance

[2] Total Fertility Rate (TFR)


Development of the total fertility rate

Source: Collected by Századvég Foundation based on Hungarian Central Statistical Office (KSH) data