The right policy for the wrong reasons

Since the collapse of socialism, demographic change has emerged as one of the biggest Rashomons of contemporary societies, especially in Central and Eastern Europe (CEE). Understood as a palpable concern by some and dismissed as a political construct by others, it is becoming increasingly prominent in public discourse. In a region with contested yet increasingly liberal social norms, including declining childbearing preferences, conservative governments from Budapest to Warsaw and Belgrade have sought to turn back the societal tide encouraging people to have more children. Financial assistance for parents, especially when coupled with abortion restrictions, have attracted a considerable liberal backlash. But should pronatalism be seen as a conservative cause? Or could raising the birth rate – currently at an all-time low in the region and lower than in most of the continent – bring palpable benefits for states and societies?

Demographers point out that low fertility, which together with increasing life expectancy results in ageing populations, raises a wide range of questions about the future sustainability of pensions, healthcare and overall living standards. Of course, concluding that these challenges can be best addressed by encouraging more births is a leap of faith. Babies increase the share of dependents in a population before decreasing it decades into the future.

Other solutions are more immediate but less feasible or popular. Immigration, especially from outside of Europe, has been shunned by the same pronatalist governments allegedly concerned about unfavorable demographics. Adaptation, for instance by lengthening the amount of time spent in work, tends to draw massive popular opposition. Automation carries electoral risks of its own and can prove challenging to implement even if the political will is found. Free from such obstacles, pronatalism has become the name of the game.

One child fewer than preferred

Even the biggest critics of CEE pronatalism could not dispute the scale and speed of the region’s fertility decline. Despite varied economic and political landscapes, CEE countries share strikingly similar fertility figures. From Budapest to Vladivostok, birthrates hover close to the EU average of 1.6 children per woman, with notable exceptions being Ukraine and Poland, where the figures dip even lower.

Beneath this overarching narrative of decline, however, lies a complex tapestry of desires and realities. Contrary to the prevailing notion of a burgeoning ‘childfree’ society, opinion surveys suggest a persistent CEE preference for larger families: most individuals aspire to the traditional two-child ideal. However, they find themselves constrained by a multitude of factors, ranging from health-related issues exacerbated by lifestyle choices and delayed parenthood to overestimations of the efficacy of reproductive technologies.

Cultural trends also exert a significant influence. Traditional divisions of labor within the home, which assign the bulk of domestic and caregiving responsibilities to women, are increasingly at odds with contemporary social norms. Faced with the ‘double burden’ of work and care, more women are opting for employment over children. Obsolete understandings of family life paradoxically keep birth rates low, much to the chagrin of traditionalists and many progressives alike, as evidenced by the persisting average preference of about two and a half children per woman.

Children’s hands as puppets. Image by jacquelinetinney via Flickr

Voluntary or not, the otherwise European-wide trend of low birth rates poses a more pressing challenge to CEE. Unlike population trends in most of Western Europe, and to a large extent because of Western Europe, net emigration characterizes CEE’s demography.1 While migration data tend to be patchy, it is evident that the balance between births and deaths, even though negative in most places in the region, is insufficient to explain key demographic changes. The EU’s ‘big bang’ enlargement into CEE in 2004, while enormously beneficial for the region, has also reduced its populations, as millions of people opted for an immediately higher standard of life in Western Europe as opposed to the near-assured yet incremental prospect of progress at home. Contrary to what pro-EU policymakers would like to hear, the exacerbating effects of EU accession on brain drain do not bode well for the Western Balkans, further strengthening the case for pronatalist policy.

Three or four children, no more, no less

At first glance, pronatalism seems equally widespread on both sides of the former Iron Curtain. The biggest star at the 2023 Budapest Demographic Summit2 was not an East European politician but Italy’s prime minister, Giorgia Meloni, who has taken measures against a declared population crisis in her country. A similar pan-continental picture emerges from the official stances of European governments regarding their desired fertility levels: in 2019 81% said they wanted births to go up, with no major geographical differences.

However, if one scratches beyond the surface of self-declarations, it appears that, apart from Meloni, it is mainly CEE policymakers who are putting their money where their mouth is. While the regional pioneer of pronatalist policy was Russia, which unveiled its Maternity Capital programme as early as 2007, it has since been surpassed – in both financial ambition and political saliency – by three other countries: Hungary, Poland and Serbia. All three nations share important similarities beyond the regular participation of their pronatalist schemes’ creators at the Budapest Demographic Summit.

First, all three countries were ruled by conservative and less-than-fully democratic governments at the time of the introduction of these policies. Of course, pronatalism is not the only topic on which Viktor Orbán’s Fidesz in Hungary, Aleksandar Vučić’s Serbian Progressive Party (SNS), and Jarosław Kaczyński’s Law and Justice (PiS) in Poland, which moved into opposition last autumn, are worth mentioning in the same sentence. From Budapest to Warsaw and Belgrade, pronatalism has coexisted with – and arguably strengthened – the popular appeal of these parties as the alleged protectors of their respective nations and core values. There is no better illustration of the uncontestable status that pronatalism has acquired in these countries than the fact that Poland’s new prime minister, Donald Tusk, has embraced and even vowed to expand the pronatalist policy he used to vehemently oppose.

Second, in all three cases, the pronatalist instrument of choice has been financial assistance for parents, which have mostly been designed to prioritize pronatalist goals over societal gain. On the one hand, pronatalism is not a zero-sum game: more cash can help current parents raise their children as much as it can encourage people to have (more) children. And the cash has definitely been flowing in spades. In Hungary, among other incentives, parents of three are exempt from paying income tax until the third child has turned 18 (as of 2019); parents of four are exempt for life (Orbán himself is a father of five). In Serbia and Poland, parents of four effectively receive an (additional) average monthly wage, which may not make a huge difference in Belgrade and Warsaw but often doubles the income of rural households.

Parents of one and two, however, don’t receive much more in Serbia and Hungary than they would elsewhere in Europe, even when accounting for the lower cost of living in the East. The Polish package is more balanced, even though it also carries some premiums past the second child. This can only be explained on pronatalist grounds: most people have one or two children regardless of policy, so the point of incentives is to encourage them to give birth to three or more. But this approach sacrifices social goals. Due to economies of scale, parents need less money for each additional child, as children in large families can share rooms and babysitters (or, in the case of large differences in age, babysit each other), pass down clothes and benefit from in-bulk food purchases. In Serbia, the timing of the support can also be problematized, as some of it is provided as a lump sum upon childbirth, possibly as a further nudge to parents.3

Thus, despite the pronatalism of their governments, Hungarian and Serbian parents with one or two children – which will always make up the majority of the population regardless of policy – are poorer than they would be if they were childless. Policymakers offer them the opportunity to at least ‘break even’ but only if they have two additional children. Interestingly, however, the support becomes less generous – and in Serbia disappears altogether – from the fifth child onwards, possibly in an attempt to exclude Romani households, which face regular discrimination in both countries. Moreover, the tax-based nature of the Hungarian package serves an explicitly anti-egalitarian function, as the tax deduction, which is expressed as a share of income, translates into larger amounts for higher-earning families.

The fact that the packages provide the biggest boost to, say, well-off farmers with three or four children, while doing little to help low-income or even middle-income urban households meet the cost of living in large cities, speaks volumes about their political dimension. Our three countries of interest are no exception to the global realignment of voter loyalties away from class and towards more cultural concerns. The conservative governments in Hungary and Poland recognized a long time ago that an appeal to tradition is their strongest election winner: abortion restrictions (which have typically not been framed in pronatalist terms), for instance, gradually established themselves as one of Orbán and Kaczyński’s signature policies. As their voter base centres predominantly on the low-educated often from rural areas, who are more likely to have large families, pronatalism might have served as a key draw for this demographic. CEE pronatalist policymakers often like to take credit for having spotted the challenge of demographic change before ‘it is too late’, but the most cunning thing about their obsession with birth rate might have been their recognition of its enormous political value.

Cash alone won’t lead to more births

Even if CEE pronatalism serves a strong political function, its potential benefits in helping ageing populations mitigate their future public spending pressures and maintain their living standards remain valid. If pronatalism works, it might not matter if policymakers are embracing it for self-serving reasons. It shouldn’t be dismissed as missing the mark completely, especially since it has been around in its current form for what is still a rather short time.4 But its success is at best debatable.

The effectiveness of pronatalist policy is notoriously difficult to measure, as birth rates might change for reasons other than policy, including cultural trends and the age structure of a population. If a country happens to have many individuals of reproductive age at a given time, it might see a misleadingly high number of births. Similarly, if it is undergoing what is known as ‘fertility postponement’, or the usually gradual shift towards having children later in life, which European countries have indeed been experiencing over the past few decades, then births might seem misleadingly low in the short term.

It is reasonably safe to conclude, however, that pronatalism has not yet been a resounding success in any of the three CEE ‘poster countries’. Hungary’s birth rate, the highest of the three, is hovering around the EU average despite offering some of the strongest incentives on the continent. Poland saw births go up in the first few years since the introduction of its pronatalist policy in 2015 before declining again to currently one of the lowest levels in Europe: 1.3 children per woman. Serbia is, for now, seeing an increase but probably no more than a few hundred new births annually can be attributed to policy.

There are plenty of possible reasons for these underwhelming results. The prioritization of third and fourth children, while seemingly conducive to pronatalism, might not be the best way to boost birth rates in countries where most people don’t want to have more than two children. Moreover, in Hungary’s case, the focus on high-income individuals, not only through the tax-based nature of the support but also through the availability of housing top-ups,5 might be counterproductive, as wealthier citizens tend to be less sensitive to policy nudges in the first place. Additionally, all three countries are characterized by some of the lowest levels of trust in government in Europe, indicating that citizens have little faith that the policies will be around long enough to be relevant to them, which might lead potential beneficiaries to exclude the packages from their family planning-related reasoning. Finally, the national-conservative and less-than-democratic climate in these countries might be deterring the more progressive layers of their populations from imagining a future at home, with or without policy.

Decoupling pronatalism from the likes of Orbán

Demographic change is a powerful thing: there is no developed country known to researchers, apart from perhaps Israel, whose context is for various reasons impossible to replicate, where population ageing and decline have been fully avoided. Yet, demographers also tend to agree that pronatalist policy is not pointless either: all family policies, including childcare, parental leave, and, yes, financial assistance, can do their small part in boosting birth rates, or more likely, in slowing their decline. Across CEE, governments have been providing more cash to parents, while at the same time curbing its pronatalist potential by failing to make childcare more accessible and affordable: the region continues to record some of the lowest enrolment rates, especially among children aged 0-3.

Serbian President Aleksandar Vucic once quipped that ‘if we don’t increase the number of children, we might as well “turn out the lights” behind us’. Inflated demographic alarmism aside, the real question might not be whether CEE can survive demographic change, but whether pronatalism can outlive the conservative agendas it is currently associated with. The case to watch right now is Poland: can progressives start embracing pronatalism if it no longer comes with abortion restrictions and ethnonationalist scaremongering? Demography, after all, is the science of hard numbers. The best thing policymakers and voters worrying about demographic change can do is to approach it free from ideological bias – be it from the Left or from the Right.