Hungary is in the spotlight as global discussions about declining birth rates intensify, particularly in Europe where populations are projected to drop by 40 million by 2050. The Wall Street Journal highlights Hungary’s substantial investment in family support initiatives, which exceeds 5% of its GDP, yet the nation struggles with a fertility rate of only 1.51 children per woman—far below the replacement level. As various countries, including Hungary and Norway, implement generous incentives such as loans, tax breaks, and free fertility treatments, the crucial question remains: do these measures effectively encourage families to have more children? Analyzing Hungary’s demographic policies reveals a complex landscape where financial incentives alone may not be enough to reverse the trend of declining births.
Hungarian portal Világgazdaság (“World Economy”) has written about The Wall Street Journal’s coverage of efforts around the world to boost fertility, and Hungary was in the spotlight.
Citing UN statistics that Europe’s population is expected to fall by 40 million by 2050, with the U.S. right behind, the American paper reportedly asked if Americans would have more children if they were given state-subsidized loans and cars, a lifetime income tax exemption, more vacation time, free fertility treatment, and other benefits.
Countries around the world have been vocal about efforts to reverse this demographic trend, but do incentives actually work? It’s a fair question as fewer babies continue to be born, regardless of age, income, or education.
WSJ highlighted both Hungary and Norway for their efforts on this front, stating that both countries spend more than 3 percent of GDP on family support initiatives, more than on their military. The U.S., meanwhile, spends 1 percent of GDP on child tax credits and programs targeting low-income Americans.
In fact, Hungary has spent more than 5 percent of GDP on its pro-family policy in recent years. Nevertheless, there are 1.5 children per woman in Hungary and 1.4 in Norway, far below the reproduction rate of 2.1 needed to keep the population stable.
WSJ noted that family support is central to PM Orbán’s government, pointing out that the demographic conference held in Budapest every two years, the Budapest Demographic Summit, “has become a meeting place for prominent conservative politicians and thinkers.”
The U.S. portal went on to note that both Tucker Carlson and JD Vance have praised Orbán’s family policy, which emphasizes having children as “a national duty” and an alternative to mass immigration to maintain a steady population.
It also notes that family benefits and low-interest loans are for the most part only for married, heterosexual, middle-class couples, and those who divorce are not only forced to pay higher rates but may have to repay the loan altogether.
But again, has the policy worked? In 2010, Hungary had a rate of 1.25 children per woman. By 2021, under successive governments of Orbán, this rose to 1.59 but has since fallen off to 1.51 as of 2023, according to data from the Hungarian Central Statistical Office.
Wall Street Journal cites data showing that through August 2024, 51,500 babies were born, 10 percent fewer than for the same period in 2023, with major issues for many women being inadequate public healthcare and education, as well as the challenge of being a working mom.
Hungary’s approaches to boosting fertility rates showcase a significant commitment to family support, which includes direct financial incentives, public policies aimed at improving work-life balance, and national campaigns promoting childbirth. Despite these efforts, the stubbornly low birth rate indicates that economic incentives may not be the sole determinants of reproductive choices. Factors such as inadequate healthcare, educational opportunities, and the challenges of balancing work and family life play critical roles in potential parents' decisions. Hungary’s experience reflects a broader European challenge, where despite considerable investments and a push toward family-friendly policies, demographic improvements remain elusive. This underscores the complexity of demographic dynamics and suggests that cultural, social, and structural changes may be necessary alongside financial incentives to foster a more favorable environment for family growth.