The demographic situation in Russia has been deteriorating for over two decades between 1992-2012 years number of the population has decreased by 5.2 million people (Rosstat, 2016). Moreover, during 1990-2005 years natural growth of the population was one of the lowest in the world. Starting from 2006 demographic concerns began to attract the attention of Russia’s policymakers wherein 2007 comprehensive family support package has been introduced (Besedina et al, 2016). The package aims to provide certain financial support to young families to have a second child. One of the reasons for fall in the number of population is significantly increasing the number of families with only one child where their share rose from 50.8% in 2002 to 67.5% in 2010 whereas the share of families with two children stood at 25% in 2010 (Elizarov & Levin, 2015).
Although there are a number of surveys indicate that families want to have a second child, but due to mainly financial concerns, many families stop at one child. For instance, a survey on reproductive assessment describes that almost half of the parents desired a second child while only 15% of the respondent had a second child (Rosstat, 2013). Therefore, the gap between the desired number and actual number varies significantly and government policies that encourage families to have a second child could increase the current fertility rate (1.7) of Russian women (World Bank, 2017).
Having said that demographic situation varies from region to region in Russia. For instance, North Caucasus, Tatarstan, and Yakutia regions have a sustainable natural population growth whereas in certain parts of the Central Federal District death rates are 15% higher than the birth rates in 2015. In total around 41 regions of Russia has facing depopulation while in the rest of the 44 regions birth rates surpasses the death rates. Geographically population in the Western part of the country is shrinking whereas in Eastern part the birth rates surpass the death rates. On this point, economic conditions, support from regional authorities and cultural differences between the regions could be associated with the different demographic structure of the regions (Rosstat, 2017).
The package covers a number of changes and improvements for families like an increase in the amount of childcare benefit, tax deductions, subsidies for preschool education and maternity capital. Previously child benefits were only available for working women during their maternity leave, starting from 2007, it included non-working women, and the amount increased by the number of birth. For instance, previously families receive 1,500 rubles ($25) per month for 18 months whereas after 2007 the amount increases to 3,000 rubles ($50) per month for the second and each subsequent child. Moreover, for the first child 20% of kindergarten cost covered by the federal budget where the number goes up to 50% for second and 70% for a third child. In addition to that, tax deduction amount is also raised from 300 rubles ($5) to 1000 (17$) ruble per month in 2009 and starting from 2012 the amount increased to 1,400 rubles (24$) for the first child and 3,000 ($50) rubles for the second and each subsequent child. Furthermore, the eligibility criterion for tax deduction limit is lifted from 40,000 ($686) rubles in 2005 to 280,000 ($4800) ruble annual incomes (Slonimczyk & Yurko, 2013).
Among the entire support program in the package, the most generous one is the maternity capital assistance that allows families to use the money for a number of identified purposes in order to contribute the family budget. In 2007, the capital amount was 250,000 ruble ($4293) which rose to 429,400 rubles ($7373) in 2014 and currently this program is still active and distributes around 700,000 certificates annually. Citizens of the Russian Federation who has given birth or adopt a second child or subsequent child after January 1, 2007, are eligible for obtaining the maternity certificate. The purpose of the certificate is to persuade families to have a second child by providing financial support for the families. The fund could be used 3 years after the birth for the purposes of children’s education from preschool to the university degree, housing improvements including buying, paying a mortgage or building a house, or for mother’s future pension fund. So far 24% of the certificate holders used their funds fully, another 37.4% used their funds partially where more than 90% of the certificate holders used their money for issues related to the housing (Elizarov & Levin, 2015).
Alongside with the federal financial assistance programs, regional authorities also provide support for the families where the scope of the assistance differentiates between regions. On this point assistance provided by the regional authorities are often determined by the budget capacity of the districts rather than a demographic situation in those regions. In their family support programs, 50 regions receive up to 90% co-financing from the federal budget which will be reduced to 50% by 2018 (Elizarov & Levin, 2015).
After the introduction of the package program, there was a significant increase in fertility rate from 1.3 in 2006 to 1.7 in 2014. During 2006-2012 years the fertility rate increased significantly by 0.4 reaching 1.7 in 2012. However, starting from 2013 growth rate has slowed down and according to UN population division medium forecast within next 15-year fertility rate will increase only 0.1 reaching to 1.8 and in 2050 it will be around 1.84. Meaning the effect of the package program has lasted only 6 years and boosted the fertility rate to 1.7 but it wasn’t good enough to pull the rate above the threshold of 2.1 (UN, 2017).
According to literature combination of cash payments, a reduction of taxes and provision of childcare support would have a positive effect on the fertility level. However not every country manages to increase their fertility rate even though they provide substantial financial assistance to families. Therefore analyzing the policies of high fertility rate countries like France would be useful to identify reasons behind its success on rising fertility rate.
Considering the family policy as a tripod, France example shows that childcare support is one of the most influential factors that has a long-lasting effect on the growth of fertility rate. In France, there are 123 Family Allowance Funds (CAF) which are coordinated by Objectives and Management Agreement (CNAF) between funds and the state (Fagnani, 2016). For instance, more than 90% of the children receive support for pre-school education in France where this number is only 58% for Russia in 2009 (Arkangelsky, et.al, 2015). Well-structured childcare assistance in France provides free pre-education to children to be registered to state kindergartens or subsidized private ones.
Talking about demographic policies money does not always solve all problems for instance, in terms amount France and Germany spend a relatively same amount of resources for their family benefits public spending. In 2013, France spent $81.6 billion or 2.91% of its GDP while Germany has allocated $80.9 billion or 2.14% of its GDP (OECD, 2017). However, France fertility rate is 2 whereas Germany’s fertility rate is at 1.4 which is far below the sustainable growth rate of 2.1 (World Bank, 2017). What differentiates France from Germany is that its extensive support for the development of childcare services for children until 6 years old. This structure allowed France to create favorable condition for women to combine work and motherhood, which is an essentially important balance in population policies (Fagnani, 2016). As a result starting from 1994 fertility rate increased from 1.73 to 2 in 2006 and maintained the same rate throughout 2006-2015 years (WB, 2017). In the case of Russia, public spending on family benefits is around $22.8 billion or 1.5% of its GDP with maternity capital and $8.8 billion or 0.58% without it in 2010 (Arkangelsky, et.al, 2015). These numbers indicate that Russia allocates 3 times less amount of financial support for it is twice the size of its population compared with France.
Comparing with France in Russia families access to childcare services are rather limited due to an insufficient number of places in state kindergartens where children wait long queue to register state nursery, moreover, due to high costs, many families cannot send their children to private ones (Arkangelsky, et.al, 2015). Development of childcare sector in Russia could have the same positive effect and boost the fertility rate in the country. In order to learn from the alternative experience of France, similar agreement model could be applied to Russia where the state could establish a centralized mechanism for supporting the funds that will subsidize the childcare centers in order to increase the access rate of families to kindergartens.
Analysis of Russia’s family support package indicates that major concerns of the families are tried to be covered by large lump-sum money offers. However, it lacks to provide tailored solutions to particular problems. For instance, the package comprises the kindergarten costs in different amounts however under this project there are no future plans to increase the number of kindergartens where waiting period to be admitted to a state kindergarten might be as long as 3 years. Moreover, certain exceptions could be included to usage rules of maternity capital like immediate access to the fund after the birth of a child for reasons related to childcare such as paying for private kindergarten and covering the basic needs of the child. In short, Russian policies aims to improve the economic conditions of families whereas French plans are more focused on childcare. As a result, French system proves that putting emphasis on childcare in demographic policies produce much beneficial result rather than general economic support programs.
In conclusion, it could be said that family package program manages to increase the fertility rate of Russia to certain level however its effects did not last long. Therefore, policymakers need to pay more attention to design long-term policies which covers the after-birth period while addressing shrinking population issues in order to ease various concerns of families on raising their children and at the same time allow them to continue working in their jobs especially for mothers.
Rosstat (2016). Russia in Figures 2016. Federal State Statistics Service.
Besedina, E., Levin, V., Aritomi, T. (2016). Going Beyond the First Child Analysis of Russian Mothers’ Desired and Actual Fertility Patterns. The World Bank Group. https://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-7643
Elizarov, V., Levin, V. (2015). Russian federation aging project Family policies in Russia: Could efforts to raise fertility rates slow population aging?. The World Bank Group. http://documents.worldbank.org/curated/en/257131468000013801/Family-policies-in-Russia-could-efforts-to-raise-fertility-rates-slow-population-aging
Rosstat (2013). The Federal Statistics Service conducted a Reproductive Assessment Survey in September–October 2012.
World Bank (2017). Fertility rate, total (births per woman). The World Bank.
Rosstat (2017). Socio-economic status of federal districts. Federal State Statistics Service.
Slonimczyk, F., Yurko, A. (2013). Assessing the Impact of the Maternity Capital Policy in Russia Using a Dynamic Model of Fertility and Employment. Institute of Labor Economics (IZA).
UN (2017). Total Population. World Population Prospects. United Nations Department of Economic and Social Affairs Population Division.
Fagnani, J. (2012). Recent reforms in childcare and family policies in France and Germany: What was at stake?. Children and Youth Services Review.
Arkangelsky, V. et.al (2015). Critical 10 Years Demographic Policies of the Russian Federation: Successes and Challenges. Russian Presidential Academy of National Economy and Public Administration (RANEPA).
OECD (2017). Family benefits public spending. Social Protection OECD Data. The Organization for Economic Co-operation and Development.
Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy.