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Economically more developed countries around the world are facing demographic winter with all its challenges, and Hungary is no exception. However, instead of resorting to the quick fix of ramping up immigration rates, the Central European country has instituted pro-family policies under Prime Minister Viktor Orbán, aiming for long-term growth, as well as preservation of Hungarian culture.

In 2019, the average European woman had 1.6 children, and the average Hungarian woman had just 1.45. Orbán, who has five children of his own, established a seven-point “Family Protection Action Plan” in an effort to boost fertility.

Under the plan, women below the age of 40 who were marrying for the first time were eligible to receive a $35,000 interest-free general-purpose loan. The entire loan would be forgiven for those with three offspring. About 2,400 families applied for the loan within two weeks of its launch.

The Family Protection Action Plan was projected to cost around $US2.5 billion (roughly 5 per cent of Hungary’s GDP and four times its defence budget). Other carrots included subsidised minivans for families with three or more children, and a lifelong exemption from income tax for mothers with four or more children.

Hungarian Foreign Minister Péter Szijjártó explained in an interview with Fox News:

“We understand very well that if we are not able to turn around the negative trend of demographics … then we will definitely not win the future. And we want to win the future, so we need more kids. We need to turn around the negative tendencies, so we have put together an action plan – we have formulated our economic policy in this direction.

“So, the question in families whether to be brave enough to have another kid must not be an economic decision anymore.”

In the February just past, Orbán announced further pro-family measures, including an income-tax exemption for mothers of two or three children, and a cap on housing loan interest rates. This came after a doubling of income-tax benefits for families.

Flicker and Fade?

Following the 2019 incentives, the Hungarian State Secretary for Family and Youth Affairs Katalin Novàk noted significant improvements in the birth rate, the fertility rate, and the number of marriages, following a steady 10 per cent decline in population over the previous 30 years.

Between January 2019 and January 2020, the birth rate (the number of births per 1,000 people) increased by 9.4 per cent. This increase was reflected in the total fertility rate (TFR: the number of babies a woman is expected to have over her lifetime), which increased from 1.4 to 1.6 children (the replacement rate is 2.1). Finally, the number of marriages increased by 100 per cent.

This encouraging trend continued, with the marriage rate doubling from 2010 to 2021 (whether calculated per 1,000 population or per 1,000 unmarried women). However, by 2023, terribly high inflation of 24 per cent after the worst drought in over a century dampened the popularity of marriage. There was also a slight drop in the TFR to 1.5 children in 2022.

Assistant Professor of Sociology Laurie DeRose at the Catholic University of America argues that despite the downturn in marriage rates, two other considerations indicate that they may recover. The divorce rate has halved since 2010. “If financial incentives were luring ill-suited couples into marriage,” she writes, “divorce rates should have been stable or increasing. Instead, the stability of Hungarian marriages may reflect growing cultural support for the institution.”

The second encouraging factor is that the mean age at first marriage has kept rising slowly but steadily. DeRose concludes:

“Hungary has become more marriage-friendly without an uptick in younger marriages that carry a higher risk of instability. This lends credence to my position that a simple cost-benefit perspective is insufficient for predicting whether Hungary’s marriage boom has fizzled. Its trends support stable marriage, not just marriage.”

DeRose adds that the overall abortion rate in Hungary has halved since 2003, and both the teen abortion rate and the teen birth rate have fallen since 2016.

Unfortunately, the TFR has fallen even further of late. A Reddit post notes:

“This year, Hungary is seeing the fastest decline in fertility rate in EU, with TFR falling to 1.32 in May, while the 12-month average is now 1.46. The number of births in May 2024 fell by 11 per cent compared to May 2023.”

The Hungarian currency, the forint, depreciated by 7.3 per cent in 2024, and the economy has been in a moribund state, particularly with the continuing drought. ING Bank states that Hungary has entered a technical recession for the second time in three years, and “household caution remains high”.

Although there tend to be more immigrants to Hungary than emigrants leaving, thousands of Hungarians depart every year, with 85 per cent being below the age of 40, and 33 per cent holding a degree. The brain drain is driven by lacklustre job prospects and salaries, plus the cost of living in the Central European nation. Attempts by the Government to entice young Hungarians home have met with scant results. Radio Free Europe reported (December 30, 2023): “In 2016, a 100 million-forint program only helped 105 Hungarians return home.”

Doldrums Down Under

Alarmingly, as News Weekly noted last year, Australia’s TFR hit a record low of 1.5 in 2023. This has been attributed to rising cost of living pressures, along with the cultural shift towards smaller families or even “child-free” marriages, and women prioritising higher education and careers; not to mention gloomy outlooks among young adults concerned about climate change and overpopulation.

Australian National University demographer Liz Allen observed that this trend towards lower birthrates creates a vicious circle as population decline erodes economic growth, further discouraging couples from procreating.

Indeed, instead of relying on runaway immigration to fill the gaps in our economy, which places even more pressure on our housing supply, Australia may do well to take a leaf out of Hungary’s book and better support the families here that are already waiting for more supportive policies to allow them to get established and grow.

Although Hungary’s family-friendly policies have collided with stiff economic headwinds, they are still in a better position than they would have been before the excellent growth from 2019-2021. As DeRose observed, there may be economic downturns that temporarily affect childbearing rates, but as long as the government supports stable marriages, society has the foundations for future sustained growth.

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Republished with thanks to News Weekly. Image courtesy of Adobe.