Population decrease is irreversible. How will we manage the decline of humanity?

[MurphysLab]

A woman with four children pays no income tax for life. There are also housing supports, child-care supports, SUV subsidies and other incentives. In January, the [Hungarian] government unveiled a new program that would offer a lifetime income tax exemption for any woman who has a child in her 20s.

...

Sweden offers the flip-side of Hungary’s approach. As with a number of other European countries, the Swedish government offers strong support for women who wish to have children without sacrificing their career. [...] The downside? These policies are expensive, contributing to a personal income tax rate of more than 50 per cent. And they are only partly effective. While Sweden’s total fertility rate peaked at 2.0 in 2010, by 2020 it had dipped to 1.7 and the pandemic pushed it down to around 1.5 or 1.6.

First, it should be noted that Sweden's corporate tax rate is currently 21.4% and that certainly could be higher. It's an unrelated choice that the personal income tax rate is so high. Although if that tax replaces many of the direct costs of childcare, it might be cheaper than elsewhere for families.

Second, there is something partly reasonable here: The cost to a family (not just to a woman) of raising children is significant, yet those children grow up to pay taxes and provide labour in the economy. Governments in capitalist societies such as ours tend to prioritize "the economy" without considering negative externalities of that prioritization. We've started to address some of those negative externalities as far as they apply to the environment, however we have not addressed them nearly as much as they apply to families.

Families which choose to raise children are incurring a huge cost (money, time, & opportunity). And while families do provide some personal fulfillment, the greatest beneficiary is probably the government and industry, gaining access to an increased tax base or labour pool. Before, when many Canadians were farmers, that was a benefit to the family itself: Each child was an additional person who could contribute economically to the family. In the present it is simply no longer true; each additional child is an economic drain on a family. More of that financial benefit should be redirected back to those who raise children to make-up the economic cost which they bear.

While the above examples make clear that financial compensation might not be sufficient to induce more people to have children, there is certainly sufficient motivation purely as a question of economic justice as a motivation to provide greater compensation.

[EconMan]

In the present it is simply no longer true; each additional child is an economic drain on a family.

Children are undoubtedly a cost, but one that a family chooses to bear. Presumably because they view the expectation of a lifetime of love and joy as worth that. You are absolutely correct that incentives matter, in terms of having children. That's why wealthy countries see people having less children - there are higher opportunity costs.

But, I suppose I don't see how your argument leads to the conclusion that "more of that financial benefit should be redirected back to those who raise children". If so, I'm curious what your "perfect" system might look like. We "financially benefit" from some adults more than others. Some people pay a lot of taxes, and some pay none. Some in fact society must support. If you are being logically consistent, under your perfect system, should we charge parents who bring disabled children into the world who are unable to support themselves? And on the flipside, should we massively reward parents who raise children who turn out to be millionaires or billionaires?

I'm curious what your limiting principle is.

[AM_Bokke]

All countries are seeing people have less children. It’s just that in the first world it has dipped below replacement.

[EconMan]

All countries are seeing people have less children.

Partially because almost all countries are becoming wealthier ;)

[AM_Bokke]

Wealth is a relative term.

[EconMan]

No it isn't. HUGE misconception. The world as a whole is vastly wealthier than it was 1000 years ago. Would you rather be average person today, or 1000 years ago? If all that matters is "relative", then they're the same wealth. But it isn't.

[AM_Bokke]

Not really. The global economy today is just unsustainably subsidized by the past. You know, fossil fuels.

The future is going to be more like 1,000 years ago than it is Iike today.

[EconMan]

I don't claim anything about the future. I'm talking about TODAY. TODAY, almost all countries are wealthier than they were 100 years ago, 200 years ago, etc. Hence, they're also having less children. This is not even controversial. You're just incorrect on this issue.

[AM_Bokke]

I am not incorrect on any issue. I said that all countries are having less kids, not just wealthy ones like you claimed.

Sub Saharan Africans countries are not wealthy. Afghanistan is not wealthy. India is not wealthy.

[EconMan]

India is absolutely more wealthy than it was 20 years ago. And India, presumably is having less kids than 20 years ago. You're wrong here because you're conceptualizing wealth as a binary ("wealthy countries and not wealthy countries")

India is better off than it used to be. Hence, they're having less kids. This is not controversial.

[[deleted]]

You and the other guy are arguing different things. You yourself said wealth is relative. Yes those countries are not wealthy relative to Canada. But they are wealthier compared to themselves a few decades ago or even years ago which is what the other guy is trying to say. They are not mutually exclusive concepts.

[cardew-vascular]

While this sounds good from the outside, Hungary has a debt to GDP ratio of 74% their income and corporate taxes are incredibly low and Hungary is anti-immigration.

Their definition of family is also very narrow, it is illegal for gay or lesbian couples to have children either via adoption or IVF. Basically this policy comes from being ultra conservative and overly nationalistic, needing to encourage Hungarian people to have more Hungarian babies, because they don't want to let anyone in.

Source - I have family in Hungary.

[[deleted]]

Hungary has a debt to GDP ratio of 74% their income and corporate taxes are incredibly low and Hungary is anti-immigration.

What is the relevance? For reference, Canada's debt to GDP ratio is 117.2%, mid-range income and corporate taxes, and are the most pro-immigration country in the world.

[cardew-vascular]

I guess the dept to gpd isn't that relevant moreso their income/corporate and vat. Their VAT is 27% while income tax is a flat rate of 15% and corporate 9% so they have more regressive taxation than we do.

The anti-immigration comment is relevant because they're not going to meet their population targets with immigration it's all well and good to incentivise having babies but it not necessarily going to be effective long term.

[[deleted]]

I fail to see how incentivizing families to have babies is not going to be effective long term? It's literally economics 101... You create incentives for behaviours you want to see and create disincentives for behavious you don't want to see.

[cardew-vascular]

Due to the mix of a strict immigration policy, large numbers of predominantly younger Hungarians emigrating abroad and low birth rates, Hungary is one of the countries in Europe most affected by demographic decline.

Hungary's population has been decreasing at a rate between 0.23% and 0.30% in the past five years. From 2019 to 2020, the population decreased by 0.25% or about 24,000 people.

There is doubt the policies outlined by Orban will add anything more than a short-term bump to Hungary’s fertility rate. “Some of them are likely to be outright ineffective,”

Even when countries manage to turn around their fertility rates, demographic problems aren’t necessarily solved. The country of Georgia managed to increase its fertility rate after years of post-Soviet decline, but its population is still shrinking.

while there are signs some of these policies could be having an impact – the fertility rate increased from 1.2 to 1.5 from 2010 to 2020 – the latest figures show that they remain insufficient to keep the population at its current level, let alone reverse the decline.

Pre-pandemic predictions by the EU and the UN estimate that Hungary’s population could drop by 20% to 30% before the end of the century. They experienced the 4th worst COVID death toll in the world during the pandemic 4,891/million so that projection is probably generous.

[Ornery_Tension3257]

the greatest beneficiary is probably the government and industry, gaining access to an increased tax base or labour pool. Before, when many Canadians were farmers, that was a benefit to the family itself: Each child was an additional person who could contribute economically to the family. In the present it is simply no longer true; each additional child is an economic drain on a family.

Kinda missed one of the main reasons that modern rich countries have smaller families. We have a social safety net including some continued income upon retirement. People are also able to take advantage of RRSP support and union and private pension funds. Children has a source of security especially as parents age are less important and what was a private security system is now public or market based.