Many countries around the world are experiencing declining birth rates and aging populations. To try to boost fertility rates, some governments have implemented financial incentives for people to have more children. Which countries offer direct payments or other monetary benefits to encourage childbearing? Here is an overview of some of the places that literally pay people to procreate.
What is the rationale behind paying people to have kids?
There are a few key reasons why governments consider financial incentives for childbearing:
- Declining fertility rates – Birth rates are falling in many developed countries. Without enough new children being born, populations will decline and age over time.
- Aging workforce and strain on social programs – As populations get older, there are fewer working age people paying taxes to support pensions, healthcare, and social services for the elderly.
- Economic growth concerns – Younger populations are seen as important for continued economic expansion, innovation, and entrepreneurship.
- National pride and influence – Some countries want to maintain or boost their global standing by increasing their population size and growth rates.
Direct payments and tax breaks for having babies are seen as ways to make it more affordable and attractive for couples to have children. The financial incentives can help offset the costs of raising kids.
What countries offer incentives for childbearing?
Here is an overview of some places around the world that offer direct payments or other financial incentives for having children:
Canada
Canada offers a tax benefit called the Canada Child Benefit (CCB) to help families with the cost of raising children under age 18. The CCB provides up to $6,833 CAD per child under age 6 and up to $5,765 CAD per child aged 6 to 17 (in 2022-2023). Benefit amounts are adjusted annually based on income. Lower income families receive higher payments.
China
China has abolished its decades-long one-child policy. Now, the government allows and encourages couples to have two children. In 2021, China announced tax deductions and longer maternity leave among new policy changes to incentivize childbirth as birth rates decline.
Finland
Finland provides a tax-free child benefit of roughly €95-177 per month for low and middle income families until a child turns 17. Parents also receive a newborn package of baby supplies and a cash maternity grant of €170.
France
France offers several family benefits like tax breaks and cash payments for having multiple children. There is a monthly family benefit for households with two or more kids under age 20. With three kids, this can amount to €1,047 per month. Large families with four children can receive around €1,523 per month.
Germany
Germany pays a child benefit of €219 per month for the first through third child. For the fourth child and beyond, the amount goes up to €225 per month. Other support includes tax deductions for children and paid parental leave.
Hungary
Hungary offers several pro-natalist policies. Women who have and raise at least four children are exempt from income tax for life. Families receive a one-time payment of 35,000 forints (~$100 USD) at birth and then monthly subsidies for each child until they turn 18.
Japan
Japan has provided monthly child allowances for low income households since the 1990s. In recent years, payments were expanded to ¥15,000 ($110 USD) per month for all children under 18, including higher income families.
Poland
Poland’s Family 500+ program gives 500 złoty (~$110 USD) per month for every child after the first until they turn 18. For low income single parents and families with disabilities, the benefit starts with the first child.
Romania
Romania pays a monthly child allowance of 600 lei (~$140 USD) per child. Families with 3 or more children receive 750 lei (~$175) per month for each child.
Russia
Russia offers several child benefits including a monthly allowance of ₽11,663 (~$170 USD) per child ages 1.5 to 3. Around age 3, families receive a one-time payment of ₽452,260 (~$6,700 USD) upon ending monthly stipends. Students ages 7 to 16 bring families a monthly benefit of ₽563 (~$8 USD).
Singapore
To boost declining fertility rates, Singapore launched the “Baby Bonus” scheme in 2001. Parents receive up to S$10,000 (~$7,400 USD) for the first and second child, and S$20,000 (~$14,800 USD) for the third and fourth. The money can be used on hospital bills, preschool, housing, and more.
South Korea
South Korea has implemented some of the most generous child subsidies to counter one of the lowest fertility rates in the world. In 2020, monthly allowances were doubled to ₩300,000 (~$230 USD) for the first child, ₩300,000 for the second, and ₩500,000 (~$380 USD) for the third child.
| Country | Child Allowance |
|---|---|
| Canada | Up to $6,833 CAD per child under 6 |
| China | Tax deductions, longer maternity leave |
| Finland | €95-177 per month until age 17 |
| France | Up to €1,523 per month for families with 4 kids |
| Germany | €219 per month for first 3 kids |
| Hungary | Income tax exemption for life with 4+ kids |
| Japan | ¥15,000 (~$110 USD) per month for all under 18 |
| Poland | 500 złoty (~$110 USD) monthly after first child |
| Romania | 600 lei (~$140 USD) monthly per child |
| Russia | ₽11,663 (~$170 USD) per month ages 1.5-3 |
| Singapore | Up to S$10,000 (~$7,400 USD) for first 2 kids |
| South Korea | Up to ₩500,000 (~$380 USD) monthly for 3rd child |
Which countries are most generous for child allowances?
Based on monthly payment amounts, some of the most generous child allowance schemes in the world are offered by the following countries:
- Canada – Up to $6,833 CAD per year ($5,065 USD) for each child under 6.
- South Korea – Up to ₩6 million (~$4,560 USD) per year for each child with monthly payments of up to ₩500,000.
- France – Around €18,276 ($19,080 USD) per year for families with four children.
- Germany – €2,628 ($2,740 USD) per year for the first three children.
- Japan – ¥180,000 (~$1,320 USD) per child annually with monthly ¥15,000 payments.
Other countries with generous lump sum amounts and one-time payments for childbirth and early childhood include Russia, Singapore, and Hungary.
How effective are financial incentives at increasing births?
The effectiveness of child allowances and other financial incentives at boosting fertility rates is debated among policy experts. Children are an enormous expense and support can make a difference for families planning their budgets. However, some sociologists argue cultural factors play a bigger role in family size decisions. In countries like Italy and Spain, extended family help with childcare may do more to encourage births than government subsidies. Political will and gender norms around working mothers also impact fertility rates.
In countries that have implemented child benefit programs and payments for multiple children, there is evidence of some positive impact on birth rates, but results are mixed:
- Canada’s child benefit helped increase total fertility rate from 1.6 to 1.7 from 2015 to 2020.
- After Poland introduced Family 500+, third child births rose 26% and fourth child births tripled.
- Birth rate in Russia jumped from 1.3 children per woman in 2006 to 1.5 in 2009 after new child allowances were introduced.
- South Korea’s birth rate has stayed below 1.0 children per woman despite big subsidies for multiple children.
- Singapore’s fertility rate rose from 1.4 to 1.6 after the Baby Bonus started but fell back to 1.1 by 2020.
Looking at these examples, additional cash support for families appears to provide a small to moderate boost to birth rates. However, payments alone cannot dramatically transform fertility. Broader social factors also need addressing to make having children more appealing and attainable.
What other policies support higher birth rates?
In addition to direct cash incentives, governments aiming to increase birth rates may consider other family friendly policies such as:
- Affordable childcare – Much of the cost of raising young children goes towards childcare and early education. Access to affordable, quality childcare can help encourage couples to have kids.
- Generous parental leave – Policies like one year of paid maternity/paternity leave make it easier for parents to balance work and child raising responsibilities.
- Workplace flexibility – Options like telecommuting, flexible schedules, and reduced hours for parents allow more time for child raising.
- Improved housing – Financial assistance for families to buy homes and access child-friendly housing.
- Tax deductions – Income tax breaks and credits for children help households offset the costs of raising kids.
- Child health services – Access to affordable pediatric care, immunizations, prenatal check-ups, and screenings provides support for parents.
A comprehensive approach combining direct financial support with services, workplace policies, and social programs gives both financial help and the infrastructure that enables couples to have and raise children.
Conclusion
Policies offering direct cash payments and tax breaks for childbearing now exist in many countries hoping to boost declining fertility rates. Some of the most generous child allowances in terms of annual amount per child are offered in Canada, South Korea, France, Germany, and Japan. Research shows these incentives can provide a small to moderate boost to birth rates. However, cash allowances alone are unlikely to dramatically transform fertility. Broader social and institutional factors also play a major role in family size decisions. Comprehensive policies are needed to make having children more affordable and manageable for households considering kids.
