How can the birth rate be raised?

The latest childbirth benefit rise may be a populist gesture, though it is in line with the current government’s election promises. A twofold rise now, just two years after the previous colossal increase, seems illogical because there are budget problems, while there has been no research on the effectiveness of such measures. Although there have been no concrete studies of such policy in Ukraine, let us turn to the findings of Ukrainian and foreign researchers for some indirect evidence of the relationship between child benefits and the birth rate.

A poll conducted by the Institute of Demography in 2007 showed the following picture. Almost 70 percent of respondents believe that the birth rate can be raised by increasing wages and salaries. The next crucial factor is improvement of housing conditions (47 percent). Then comes the creation of conditions for successfully combining a career with maternity and paternity (read: kindergartens; 23.4 percent). And only then go increased lump-sum allowances (21.8 percent), tax exemptions for families with children (21.0 percent), and monthly aid for all families until the child comes of age (20.5 percent). This survey was conducted immediately after benefits had been raised in 2007, and the monograph was published in 2008. I wonder if the government has seen these figures. People themselves are saying what they need: economic stability, a viable housing market, and high-quality daycare facilities. The latter seems, incidentally, to be the most influential factor that explains why birth rate is still on the rise in France, a model country in Europe as far as tackling the low birthrate problem is concerned.

The European Commission’s Directorate-General for Employment, Social Affairs and Equal Opportunities has commissioned the RAND Corporation to conduct a large-scale study of the effectiveness of policies aimed at raising the birthrate in Europe. Researchers have assessed the results of these policies, both indirect ones aimed at improving economic and living standards, and addressing educational and gender-related issues, as well as direct ones, such as child benefits, tax exemptions, affordable housing, and the initiatives that take into account the needs of working parents.

Such measures as direct child benefits (an analog to the childbirth benefit in Ukraine) have been resorted to by the governments of various countries since the 19th century. Allowances of this kind exist today in practically all European countries. Canadian researchers Gauthier and Hazius have concluded, using data from 22 developed countries, that this policy is ineffective: increasing the benefits only results in a negligible growth of the birthrate. Besides, this short-term effect is usually caused by people who planned to have more children anyway — a simple increase in the benefit prompts them to fulfill their plans a little earlier and encourages earlier motherhood, rather than increases the number of children.

However, a group of US academics, with Prof. Whittington at the head, has concluded that, child tax credits — additional tax exemptions for each child — help increase the number of children per family and speed up their birth.

Unfortunately, there are very few studies addressing the issue of affordable housing. Yet Prof. Haun claims that affordable housing affects birthrate as much as other policies. The chapter on the initiatives that take into account the requirements of working parents embraces several aspects of life. For example, a longer paid maternity leave has some positive effects on birthrate. However, in countries with generous direct benefits and a network of state-run daycare facilities a long maternity leave does not affect birthrate. In its turn, a system of high-quality state-run daycare facilities offers career women better opportunities to successfully combine professional and domestic duties and, accordingly, has a positive effect on fertility. It should be emphasized that the problem of a higher birthrate requires a thorough analysis that will take into account both the experience of other countries in pursuing various policies and the national specifics (including public opinion polls) because family traditions and present-day societal trends may essentially differ and increase or diminish the influence of certain governmental policies.

Let us look at the data of the State Statistics Committee. Indeed, the birthrate increased in Ukraine in absolute terms, as well as relatively to the population in 2007-08, after an essential rise in the childbirth benefit. But we can also see that a similar change occurred in 2005-06, and then the growth stopped, and the 2009 birthrate figures almost did not differ from those of 2008. Incidentally, a simple comparison of countrywide figures does not answer the question of whether or not these changes result from increased benefits, as many accompanying factors are not taken into account, such as the impact of the economic crisis or the number of 25-35-year-old women, who are responsible for most births.

It is quite possible that, for want of benefits, the birthrate could have essentially changed as a result of the crisis. On the other hand, the combination of increased benefits and the achievement of an active reproductive age by the women born in the 1980s (incidentally, also a short-term effect of a longer paid maternal leave) leads to the exaggeration of the effect of a given policy. As we can see, our government is making use of policies that are implemented around the world, but it does not take into account the experience of other countries and does not analyze the effectiveness of their policies.

Maybe, we should employ novel methods based on scientific research. For example, some studies claim that power cuts have a positive effect on fertility and show that there may be a reverse effect — a drop in fertility as a result of electrification. Some developing countries, such as India, Bhutan, and the Philippines, are making use of scientific findings and are successfully reducing the birthrate by means of electrification. So shall we resume the employ of power cuts? But this should be done suddenly so that people cannot get ready well in advance and re-plan their time. Who knows, maybe, the married couples that were going to watch a favorite soap opera at this time will choose to get down to boosting the birthrate.

Another option is based on research into the impact of various natural calamities, such as tsunamis, hurricanes, and floods, on fertility. Scientists claim that the risk of a calamity and the calamity itself can lead to increased and diminished fertility, respectively. Besides, small storm alerts tend to increase the birthrate, while warnings of highly ruinous storms will cause fertility to drop. Therefore, the main thing is not to overdo it: there must always be the danger of a small disaster, but the disaster itself must be warded off.

Olena Nizalova is a senior research associate at the Kyiv Economic Institute and the Kyiv School of Economics