A most dramatic move to stem declining birth rates and shrinking populations – Hungary announced that it will offer life-long tax exemptions for mothers with 2 or more children.
But will it work?
Hungary has already introduced housing subsidies, childcare benefits, and low-interest family loans to help young parents.
Yet despite these measures, their birthrate continues to be low and falling.
Life-long tax exemption is certainly a very lucrative incentive, but it will come at a very high cost – The ratio of Female To Male Tertiary Enrollment in Hungary was 1.2x in 2022, meaning females could become more than 50% of the country’s skilled workforce.
Providing tax exemptions to such a large, high-earning constituency could impact government revenues and spending.
For a detailed analysis of the impact of declining populations, read “The Age of Decay: How Aging and Shrinking Populations could Usher in the Decline of Civilization”.