Hungary already gears its pro-family economy towards more children, but what more can it do?

All barriers to more children in Hungary can be lifted through government action, writes Central Bank governor György Matolcsy

editor: REMIX NEWS
author: György Matolcsy

In its goal to achieve a full demographic turnaround, Hungary already meets the most essential criterion, which involves Hungarian women placing children at the center of their values and life goals. All other obstacles to having children be eliminated, as they only require government policy changes, Central Bank governor György Matolcsy writes in his influential column on business news portal

Now that the representation of family policy in the Hungarian government, Katalin Novak, has reached the ministerial level, it is worth gathering ideas about how family policy can be improved.

How far have we come?

The family policy program started in 2010 — but which has not yet reached all of its goals — is about.a third of the way through the overall process. The strategy has seen its fair share of victories, all of which helped kickstart the population’s demographic turnaround, but have not yet been sufficient for complete success. 

So far, the national pro-family strategy has seen the creation of a labor-based society, the elimination of the situation of “having children equaling a life of poverty”, measures to reduce the “high-pressure” labor market, a new family tax system, a growth in incomes, and the underlying equilibrium and growth-oriented economic policies.

Hungarians, as a population, will become sustainable in the long run with the birth of at least 110,000 children a year. According to the MNB’s demographic proposals, the number of newborns will increase by 2,000 every year until 2030, helping us reach this level. If more than that is achieved, it is even better, but if the growth in the number of children falls below the level of 2,000 a year falls short, the original goal will no longer be achieved.

Countries that follow a successful childbearing strategy all have long-term sustainable policies — immigration is not one of them — and achieve success with at least five main tools.

First, having a child must be tied to earning and income that is secure, mostly in the from of part-time earning opportunities in the labor market.

Second, having a child is accompanied by home-building opportunities that provide access to an ever-expanding family space. Large families with age-vertical family coexistence must be possible for many.

Third, children’s institutions must be accessible from crèche to kindergarten, from elementary school to upper-secondary school. These institutions must not be too far away, they should be easily accessible, they must offer good-quality care, and provide necessary health conditions.

Fourth, there are dense and wide-ranging networks of supportive relationships in society that facilitate employment, recreation, further training, and a social life. Having a child should not mean a lonely struggle, social exclusion, employment risk, or falling behind.

Fifth, having a child mist be “in-fashion” and bring recognition from society, including access to new opportunities. Overall, people who choose to have a child must ensure the sustainability of their previous social, income, and wealth levels, and all of these factors should only be improved.

Successful international solutions (e.g. France, USA, Israel, Iceland, England) all use targeted family policies which have led to results. Targeting is based on the internal values, vision and social situations of the given social communities. These vary around the world, so targeting and the tools that bring results are also different from country to country.

What follows from the Hungarian values, individual and family visions and the situation of Hungarian society?

Some crucial and instructive features:

  • According to the research of Mária Kopp, young Hungarian women want two to three children, which means the value and purpose of the child is already there and many woman want to participate in the role of being a mother.
  • However, research by the demographic team of József Benda offers a more nuanced picture. Five percent of Hungarian women would choose a career and an “unrestricted” life instead of a child, 70 percent want to strike a balance between child and work, while a quarter would prioritize a child. The first group will have no children, the second group will stop at one child and the third group may have two, three, four, and even more children.
  • The birth of the first child is fundamentally hampered by the often hidden health problems that result, in no small part, from the women committing themselves later in life to having a child. This is massive issue for women of childbearing age today, and the solutions available  are scarce and expensive.
  • The birth of a second child is often hampered by the shock of raising the first child, which results from problems ranging from lack of an available home to transportation problems as well as the lack of good kindergarten to issues of an inflexible workplace.
  • The undertaking of three or more children is all hindered by the above factors, and in addition, each child added has an exponential effect.

Strangely, in terms of the overall demographic turnaround, the factors listed above also represent good news. The most important among the values ​​and life goals is the prominent fact that Hungarian women want children. This sentiment cannot be replaced, and in all of Europe, it is an exceptional situation that Hungary has so many women who want to have children. All other constraints to having a child can be lifted because “only” government decisions, money, allied institutions, organization, flexibility, and some benevolence are needed.

Let’s look at some of these policies the government can decide to put in place to improve Hungary’s demographic situation:

It is a government decision to make clear that in addition to work and study, having a child also represents a bonus in life on the road to adequate income, wealth, a home, a middle-class lifestyle, and a secure retirement.

It is a government decision to link the demographic program to home creation, transport infrastructure developments, labor market regulation, the tax system, and the pension system. These are either not connected at all today, or their bonds can be strengthened.

It is a government decision to give priority to women with three or more children. It is safe to say that three-quarters of born in Hungary could come from a quarter of couples by 2030 and beyond.

The link between creating a home and having a child has begun, and this needs to be strengthened in a targeted way and on a larger scale in every respect. Large families and large families living together need more serious sized homes instead of today’s 60 to 70 square meters (645-753 square feet).

The inclusion of disused state and municipal lands, the construction of new utilities and part of transport developments should be linked to ensuring this home creation occurs. Families should be given the opportunity to occupy and truly “inhabit” the country. Such a home-building program may also be supported by a central bank credit line.

The promotion of childbearing should be at the core of the health system.

It is worth gearing the pension system towards recognizing childbearing even as a means of creating social capital, while maintaining targeting through the tax system to increase knowledge capital.


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