Could ‘baby loans’ help Hungary to boost falling population?
Posted For: Emailed to TNBD
Hungary’s population is in freefall and the country could lose more than one million inhabitants over the next few decades.
The government has set in motion a series of financial incentives to persuade families to have more children, but the jury is out on whether those schemes are having the intended impact.
The Szabo family considers itself lucky. A couple of years ago, they finished building their three-bedroom home on the outskirts of Budapest with the help of funds they received from the Hungarian government after the birth of their third child.
“If we hadn’t been eligible, I can’t think of any other way we could have paid for this home that you are looking at now,” said Attila Szabo, the father of three young children.
The Szabos initially received a $50,000-dollar loan as part of a programme launched by the Hungarian government in 2019 aimed at boosting fertility rates.
Under the scheme, half the loan was written off after their third child was born and the rest can be paid back within 20 years. The family were delighted with the deal but insist it wasn’t the main reason for having a large family.
“We are one of few couples that actually wanted as many kids as possible, without even thinking about the financial implications or this particular legislation,” said Szabo.
Hungary is home to just over 9.5 million people, but statistics show its birth rate has been in a sharp decline since the 1980s, and by 2050 the population could shrink by as many as 1.5 million people.
“The demographic situation is deteriorating. Since the last census, Hungary has lost 300,000 residents, which is hugely significant for a country of our size,” said Bod Peter Akos, a former member of the Hungarian National Assembly.
The government is trying to curb the decline with so-called ‘baby loans’ – tax breaks for families with three or more children. But experts say that so far these are having little impact.
“We are losing young people because they migrate to higher-wage countries. This is the group that really counts because they are the ones who will have children; one-eighth of Hungarian babies are born outside Hungary,” said Akos.
It’s not just emigration that is reducing Hungary’s population. Life expectancy is five years lower than the European Union average of 80 years.
State-sponsored IVF clinics are also a part of the Hungarian government’s plan to boost fertility rates. But for now, more Hungarians die each year than are born. Nothing has yet reversed that trend.
Zsolt Magyari and Szandra Kocsis have chosen only to have one child.
They say their experience of pregnancy and childbirth was traumatic – and they will only consider having another child if Hungarian healthcare, and particularly maternity care, improves.
“The birth of our son was one of the most intensive, emotional times of our life. As soon as he was born, I was separated from him, and I was separated from her,” said Magyari. “The kid was taken away. She was taken away.”
The couple said the hospital staff took their baby from them right after he was born, for no medical purpose and against their will. The baby was returned the next day, but the couple say this is an example of how insensitive healthcare workers at state hospitals in Hungary can be.
“It was so cruel, we were told that we should sleep and have a rest, it was a bad experience,” said Szandra Kocsis.
The Hungarian government has defended its policies, saying that boosting the birthrate is not a quick fix and will take a decade.
Critics say that instead of loans and tax cuts, more should be spent on fixing healthcare and education – with an emphasis on quality over quantity.