Competing subsidies? The impact of various policy measures on second births in contemporary Hungary

Livia Olah, Stockholm University
Lívia Murinkó, Hungarian Demographic Research Institute
Zsolt Speder, Hungarian Demographic Research Institute

Europe is a region of ageing societies, hence the issue of whether policies can make a difference with respect to fertility is of great importance. Also, studying policy contexts beyond the most developed West- and North European economies will contribute to a better understanding of whether and how various policy measures influence fertility behaviour. As policy effects are likely to be parity-specific, we focus on the second birth which has increasingly become a choice. In this paper, we study Hungary, given major changes in family policies since the late 1980s, making it an ideal case to address critical junctures and their impacts as an optimal way to examine policy effects on fertility. 1989 to 2012/2013 is the period we study, benefiting from the Hungarian Generations and Gender Survey. The event in focus is conception leading to the second birth for women and men. The tool of analysis is piecewise constant proportional hazards model. Our main variables of interest are three policy measures: the Bokros package during which there were major cut-backs in family policy provisions; tax relief which was provided for a limited period, and family allowance. Our results show that the risk of second conception was lower during the period when the Bokros package was in effect, but when we include tax relief in the model, the negative effect gets mitigated. Hence, the introduction of the tax relief halted the decrease in second-birth risk, which however showed when the tax relief was abolished. The family allowance has a small but positive effect on second conception for the entire period. The findings suggest that second-birth rates in Hungary have been shaped by the competing impacts of various policy measures over the past two decades, some of which have mitigated / halted the general decline in fertility to some extent.