Do you know what is the optimal average number of children for Russian women? Thankfully, Vladimir Putin has the answer! It’s precisely 2.1 childbirths per woman. So, snap to it all you young and able-bodied comrades!
Not to be outdone, the Xi’s CCP has now offered Chinese women a “fertility bonus” of 3600 (~ $500) yuan per child until they reach the age of 3. That’s quite a reversal from the infamous one-child policy that was officially revoked in 2015.
Meanwhile, in South Korea, pro-natalist spending has been in effect for over a decade, offering baby bonuses, cash rewards, exemption from military service, and has even provided state-sponsored dating events. Despite Seoul’s best efforts, their 1.12 children per woman is only outdone by Taiwan at 1.11 as the second-lowest fertility rates on the planet.
The diagnosis: The pro-natalist interventions that attempt to benefit child-bearing couples at the expense of the rest of their citizenry haven’t delivered on their promise.
I once explored Soviet fertility policy-making with the late, great Yuri Maltsev. He relayed to me that he saw the statistics on low fertility and the high number of abortions before his defection to the US in the twilight of the regime. In that data, he saw that Soviet women—despite the pro-natalist schemes of their rulers—were averaging between 5-7 abortions per woman. It was an astonishing statistic. However, this anecdote squares with data from earlier decades, where it was reported that, in the late 1950s, Soviet abortions equaled the number of live births. This came about despite the pro-natalist policies of the Stalinist era, where the childless-tax (nalog na bezdetnost) which targeted men and women of prime child-producing years was meant to spur new births. Specifically, it taxed childless workers an additional 6 percent of their annual income in comparison to their fellow comrades. As that policy didn’t produce the desired outcome, the Soviet leadership took further steps in the attempt to boost fertility rates, by outlawing most abortions in 1963 along with measures to make divorce very difficult to obtain. All to no avail. Alongside its failed objective, this also represents an unethical nature of taxation, as it served as a wealth transfer from tax payers to tax beneficiaries.
Despite the litany of failed policies, it hasn’t stopped Russia’s current leadership from turning to the days of the Soviet Union and their “Mother Heroine” approach. These policies failed to produce the state’s desired number of offspring per mother in the bygone communist era, and they will fail again and for similar reasons.
The stark reversal in Chinese natalist policy now sees Beijing promoting the so-called three-child policy. There, both maternal and paternal work leave benefits have been deployed and the central government has committed to expand spending for childcare centers. Yet, this rush to get children into government-led childcare hasn’t resulted in the intended fertility increases. Furthermore, it contributes to the de-coupling of mothers. It’s been observed that, “most provinces still expect women to return to work as soon as possible after maternity leave. As a result, the construction of mother-and-child facilities in the workplace has become an important means of encouraging defamilialization.”
In the South Korean case, abortion access was strictly curtailed in the mid-2000s and its 1.08 children per woman birth rate in 2005 has barely budged. Coupled with pledges to boost parental leave for moms and dads, calls for flexible employment schedules, and baby bonuses. Even with these enticements, Choo and Jales estimated that nearly ¾ of South Korean births that took place under these incentives would have occurred anyhow.
The abysmal record of pro-natalist policies in these nations should come as no surprise. Putin seems to have some realization that there are other issues to be tackled in order to boost fertility rates, pointing to difficult economic conditions that are already contributing to ongoing childbirth decline. Despite this acknowledgment, the interventions that have spurred the collapse of both marriage and fertility in these eastern nations have largely been ignored.
For example, average housing prices in Russia have increased by more than 3x since 2008. In the Chinese case, they’ve risen by 5-fold since 2003 and South Korean detached homes now have an average price in USD of over $800k! The link between rising average home prices and their impact on young households of child-bearing age is powerfully and almost universally negative.
This particular price is well known to alter family life, but these costs are based on underlying interventions that are driving them. Principally, inflationary monetary policy, supply restrictions, building codes, just to name a few. In fact, suppressed interest rates—leading to excessive borrowing and debt loads—and a government-created shortage of nearly a quarter million housing units in South Korea has driven its housing price spike.
The South Korean case illustrates how there are dozens of repeal measures, not to mention a move toward sound money that must be made if they wish to see fertility rates return to replacement or growth rates. Instead, these eastern regimes are falling into the intervention spiral that piles subsidies on top of regulations, on top of inflationary policy—a process that Mises and his students have consistently warned us of.
Unless significant repeal and rollback of eastern interventions take place these pro-natalist policies will only feed future interventions, such as price controls over the goods that governments are subsidizing demand for. This will prove to be as fruitless as the couples that are languishing under their interventionist regimes.
