Cash support vs. tax incentives: The differential impact of policy interventions on third births in contemporary Hungary

Abstract

Following steep falls in birth rates in Central and Eastern European countries during the economic and institutional restructuring of the early 1990s, governments made substantial efforts to stop or at least reduce the fertility decline. In Hungary, parents with three or more children could benefit from specific new policy measures: the flat-rate child-rearing support paid from the youngest child's third to eighth birthdays (signalling recognition of stay-at-home motherhood) and a redesigned and upgraded tax relief system. However, the success of these policy measures, if any, is difficult to detect in aggregate statistics. Analysing data from the Hungarian Generations and Gender Survey, we rely on event history methods to examine the policies’ effects on third birth risks, especially among different socio-economic groups. The results indicate that while the child-rearing support increased third birth risks among the least educated, the generous tax relief had a similar effect for parents with tertiary education.

Keywords:

• fertility
• population policy
• cash support
• tax concession
• third birth
• policy effect
• social differences
• social transition
• Hungary
• Generations and Gender Survey

ORCID

Lívia Murinkó http://orcid.org/0000-0002-4145-2412

Livia Sz. Oláh https://orcid.org/0000-0001-9698-5665

Notes

1 Zsolt Spéder and Lívia Murinkó are based at the Hungarian Demographic Research Institute; Livia Sz. Oláh is based in the Department of Sociology, Stockholm University. Please address all correspondence to Zsolt Spéder at the Hungarian Demographic Research Institute, Buday László utca 1–3, 1024 Budapest, Hungary; or by E-mail: [email protected]

2 Financial support to the authors via the Swedish Research Council grant to the Linnaeus Center on Social Policy and Family Dynamics in Europe, SPaDE (grant number 349-2007-8701), and to the first and second authors via the Hungarian Science Foundation under the grant ‘Families in Transition’ (K109397) are gratefully acknowledged.

3 We thank participants for excellent suggestions at various workshops in Berlin, Budapest, and Stockholm, as well as the anonymous reviewers and editor of the journal for their invaluable comments.