Today in the city Gallup 23.10.2019

Hungary offers families tax and loan breaks to boost birth rate

Hungarian Prime Minister Viktor Orban announced over the weekend that he will offer families tax breaks and loan benefits in a bid to boost his country's birth rate.

In the announcement on Sunday, Orban pointed toward his notorious anti-immigration policies as a reason for launching the incentives.

"There are fewer and fewer children born in Europe," he said.

"For the West, the answer is immigration. For every missing child there should be one coming in and then the numbers will be fine."

"But we not need numbers. We need Hungarian children," he added.

Among Orban's incentives, is the write-off of income tax for mothers raising four or more children, and loan benefits for families with two children, making house and car purchases more accessible.

But how much of what Orban says is true? And does Europe have anything to worry about?

Europe's fertility rates

In order for a population to completely sustain or replace itself without relying on migration, each woman would need to give birth to 2.1 children, which is generally accepted as the rate of "replacement-level fertility."

However, the European Union's average fertility rate sits below this at 1.6 births per woman, according to Eurostat statistics from 2016.

Hungary's fertility rate at 1.45 births is therefore below even the EU average.

In fact, according to the same statistics, even the EU countries with the highest fertility rates -France at 1.92 and Sweden at 1.88 - don't reach the rate for replacement-level fertility.

Therefore, population numbers are maintained and increased by other factors, such as an ageing population or migration.

A data set produced by the International Institute for Applied Systems Analysis and the Vienna Institute of Demography found that the EU could expect its population to decline more than 5% by 2050, should migration statistics be waivered.

However, an EU population inclusive of migration could expect to see a growth of 6.6% by 2050.

Does this pose a problem for Europe?

Euronews spoke to Dr George Leeson, the director of the Oxford Institute of Population Aging, who said these figures do not necessarily indicate something negative.

"Our levels of fertility rates have been low in Europe for decades," he said. "So, the idea that we're plummeting into low levels is not true."

These low rates can be attributed to a number of factors, but the empowerment of women is a leading one.

With choosing to pursue careers and education, women are also choosing partners later in life, therefore delaying the age they decide to have children.

However, Andrew Cartwright, a research fellow at the centre for policy studies at the Central European University, said lower fertility rates in central and eastern European countries could also be attributed to other factors, such as poverty.

"The general story is low wages leads to lower fertility and higher out-migration, so almost all the countries in [central and eastern Europe] witness significant population decline," he said in a conversation with Euronews.

"Where the decline is slower then it is more to do with people living longer rather than having more children, and it is rarely down to migration."

But, in short, Leeson said, lower fertility rates are giving populations "breathing space," to seriously think about how to tackle consumption and climate change, and other issues around the globe.

How will Orban's incentives affect Hungary?

When asked specifically about Orban's proposed financial incentives, Leeson said: "to say that it's short-sighted is a gross underestimation."

"It's a very 19th Century attitude," he said. "If a government wants to encourage women to have more children, we need to ask what motivates that. I find it hard to believe that it is something women themselves are demanding."

With Orban's specific mention of disregarding the West's reliance on migration to maintain population figures, Leeson noted that migration can actually provide great benefits.

Migrants entering a country tend to be of working age, meaning they join the labour force and contribute to the country they are residing in, he said.

To take this away, and instead rely on boosting birth rates, you will be left waiting for two decades until that generation can enter the workforce.

This would leave a huge gap in support for both elderly and the younger populations, Leeson said.

However, Cartwright noted that Orban's incentives might not only be encouraging more pregnancies, but it may also be encouraging the population into employment in Hungary, rather than being tempted by high wages in neighbouring states.

"The thing about [Orban's] announcement is that they are clearly targeting those who are in work," he said.

"Unemployment and poverty are concentrated in certain parts of the country; they are also at far higher levels amongst the Roma minority."

"The policy goal then is not only higher labour participation which on paper they seemed to have achieved, but better, higher paying, longer lasting jobs that make people want to stay in the places they were born."

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