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Maternal Capital Leads to Earlier Second Births

Maternal capital has helped increase birthrates in Russia, but its contribution to total fertility has been limited so far, with just 15 more children per 100 women of reproductive age, according to Fabian Slonimczyk and Anna Yurko, Associate Professors at the HSE International College of Economics and Finance. On the other hand, the proportion of women wishing to have more than one child has increased, and postponed births tend to occur sooner than planned, apparently influenced by the country's pro-fertility policies.

Maternal (maternity, family) capital – a benefit introduced since 2007 to encourage families to have more than one child – together with other pro-natalist measures such as larger maternity and child allowances, and additional regional handouts, has had an impact on overall reproduction, but the question of its net contribution to birthrates remains open.

Russia introduced multiple pro-natalist measures almost simultaneously, thus it is difficult to assess the separate effect of 'maternal capital', according to Slonimczyk and Yurko's paper Assessing the Impact of the Maternity Capital Policy in Russia, published in Demographic Review, Issue 3, 2015. In addition to this, both the difference in the number of children born and planned and the intervals between births should be considered in studying fertility.

A simple example would be a family intending – and eventually having – two children vs. a family initially planning two children, but deciding to have a third child after the introduction of incentives. The only way to find out whether the latter family's decision was driven by internal (wishing to have three children in the first place) or external (encouraged by the maternity benefit) motives is to run a survey. As for the former family, the planned timing of the second birth is important. Theoretically, the maternal capital policy could encourage an earlier yet preplanned birth, thus shortening the interval between births rather than adding to effective fertility rates.

Accoding to Slonimczyk and Yurko, shorter intervals between births – when subsequent births are preplanned yet occurring earlier than they would have occurred in absence of incentives – can explain the increase in natural population growth observed since the late 2000s.

It will take years to fully assess the impact of pro-natalist policies. "To what extent women’s childbearing decisions have been influenced by the maternal capital programme will only be clear at the end of their reproductive years (age 49)," according to the study's authors. At the moment though, it may not be possible to distinguish between total fertility (i.e. the ultimate number of children) and shorter intervals between births.

Yurko and Slonimczyk used data from Rosstat, the Human Fertility Database, and Russian Longitudinal Monitoring Survey (RLMS) – a household survey of 10,000 residents in 32 Russian regions, conducted periodically by the HSE. The paper takes into account variables such as women's income, marital status, education, type of settlement, etc. 

More Large Families

In Russia, the total fertility rate (TFR, births per woman of reproductive age) dropped in the 1990s and then increased in the 2000s, reaching 1.78 births per woman in 2015, which is still below the replacement-level fertility of 2.1. In an attempt to curb depopulation, the government introduced direct financial incentives, such as maternity capital, to encourage more births. In 2016, the amount exceeded 453,000 rubles, yet its effect so far has been controversial (see Maternal Capital Leads to Births of 'Postponed' BabiesMaternal Capital Leads to Earlier Births, but Not to More Births;Maternal Capital Causes a 'Baby Boom' in Russian Villages).

According to official data, the introduction of 'maternal capital' helped increase Russia's TFR by 0.4 births per woman, which sounds substantial.

Yet according to Slonimczyk and Yurko, this number appears to be an overestimate. By their estimates, the maternal capital policy has increased the TFR by 0.15 births per woman. Just 15 more children per hundred women is admittedly a modest effect, but it is sufficient to cause significant changes in the structure of an average family.

Another important effect, according to Slonimczyk and Yurko, is the increase by approximately 10 percentage points of the proportion of households with two or more children.

Higher Impact on Low-income Families

The maternal capital policy appears to have had more impact on low-income whomen and those without university education. "One gets the impression that the programme ... has more effect on relatively less affluent women," the researchers comment.

However, they found zero effect of maternity incentives on employment and no difference in the effect of the maternal capital policy on employed and unemployed women. In terms of marital status, the effect was higher for married women.

An Army of Babies?

Slonimczyk and Yurko's study confirms earlier findings that the maternal capital policy has had an effect on second and subsequent births, but virtually none on first births (see Maternal Capital Helped the Births of 'Postponed' Babies). Yurko and Slonimczyk note some effect on first births, but explain it by the "higher value attributed to the prospect of having a second child" in the context of available incentives. They emphasise, however, that in terms of decision-making, first births are fundamentally different from second and subsequent ones and may be far less sensitive to financial incentives.

A key question remains, however, to what extent the government's pro-natalist policies have helped increase the ultimate number of births to women of childbearing age at the time of the maternal capital programme; this question can only be answered at the end of their reproductive years. So far, the study's findings demonstrate that the observed increase in new births after 2007 is due to shorter intervals between preplanned births and may not have an effect on total fertility in the long-term.

The findings from the three waves (2004, 2007, and 2011) of the 'Parents and Children, Men and Women in Family and Society' survey further support the assumption that Russia's demographic policy has had an effect on the timing of births only. The survey reveals that although financial aid to families with children has clearly increased, people's reproductive intentions have not changed much – the three survey waves found virtually the same attitudes concerning the desired number of children in the family.

The policy's effect also depends on how maternal capital can be used. Currently, families are allowed to spend the funds mainly on better housing, children's education, and contributions towards the mother's pension. The study's authors, as well as numerous other experts, believe that expanding the range of options could be beneficial.

Author: Olga Sobolevskaya, March 11, 2016