As we mentioned a while ago on this blog, the French fertility rate is falling – and this is a concern for those who have looked on France as the country that had the policy answers for declining birth rates. Perhaps the government does not have the answers for a declining birth rate – perhaps the malaise and answers lie deeper: at the cultural and, in the broadest sense of the term, the spiritual level. That was my one reservation I had with the video I linked to in last week’s blogpost: as I mentioned at the time, I’m not convinced that governmental policy, by itself, will arrest a declining birth rate.
But perhaps every little bit helps and countries will continue to try different policy settings. Another country in Europe that is trying to reverse its dire demographic numbers is Poland. Unlike France, Poland has been below the replacement total fertility rate (the number of children a 15 year old living today may be expected to have over the course of her life) of 2.1 children per woman for the last twenty years. Indeed the total fertility rate in Poland is well below 1.5, nowhere near the giddy heights of France's rate of 1.88, even after the recent French fertility dip. In 2015 the Law and Justice Party proposed a new plan to make it economically easier for parents to have more children. The plan was to give 500 zlotys (USD150) per month to every Polish family for every child that they had after their first. (This is on top of a child tax credit benefit.) The benefit may be larger for single parents or for children with disabilities.
So what impact has this program had? Has it worked to raise Poland’s fertility rate? And how much does it cost? Thanks to this excellent analysis by Lyman Stone over at First Things, I can give you some of the answers to those questions. First, the overall number of births in Poland since 2015 (when the policy was announced) has increased. There were more births in 2016 than in 2015 (perhaps capturing those parents who keep informed about family policies and change their behaviour accordingly) and there were more births in 2017 than there were in 2016 (perhaps indicating that more people became aware of the policy once others they knew started to receive payments). Having said that, much of the increase in 2016 reflects children that were born in that year but conceived well before the policy was announced. The number of births in Poland began rising in February 2015, well before the policy had even been proposed.
Furthermore, this data is over inclusive: it captures all births. But the government’s policy only provides monthly payments to those families that have second, third, fourth children etc. That is, all children except the first. The number of “higher-parity” births (ie not first children) increased sharply in 2016 and are now at the highest level they have been for a decade. At the same time the number of first children also increased in 2016, but at a much lower level. This tends to suggest that the policy may be having some effect.
The larger number of births in the last couple of years is pushing up the total fertility rate. The TFR has increased from its 2012 rate of 1.29 children per woman to 1.42 in 2016. This is an increase, but a small one: not a baby boom, but a baby bump according to Stone. Furthermore, it is still far below the replacement rate of 2.1.
Now, it is early days and it will be interesting to see whether the trend continues, but it should be kept in mind that the Polish policy is expensive: it pays out about USD1,800 per eligible child. The represents a benefit equal to about seven per cent of what a worker could expect to make from working (closer to 10 per cent when tax is taken into account). A comparable payment in the USA would be a policy paying USD4,200 in untaxed payments per child per year. The policy overall is costing Poland about USD6 billion a year, or roughly 1.3 per cent of the country’s GDP. And if it proves to be successful in pushing up the number of second children, then the cost will grow to be much more.
As Stone notes, such a policy is useful to improve birth rates, but is not a sufficient answer by itself:
“… the solution to low fertility is not some silver-bullet policy that will create millions of new births. A mixture of financial support and leave time would be helpful, as would reforms to key gatekeepers of the economic life cycle (such as universities) and shifts in cultural attitudes about family, community, and childcare. The path to more kids runs through Washington, but also through our homes, our churches, and our communities, and through other countries.”
Poland is determined not to turn to largescale migration as an answer to its demographic problem. Whether it can find that answer elsewhere remains to be seen. If it can, then perhaps demographic watchers will start pointing to it, rather than France, as an example to be followed elsewhere.