Bartek Sadowski/Bloomberg

Poland's Taking a Stand Against Europe's Demographic Decline

The conservative government has splashed out on child-support
From

Poland is overtaking its neighbors in the race to avert the demographic downturn.

Family payments introduced by the new conservative-led government, worth 500 zloty ($128) per month for every child after the first, now put eastern Europe's biggest economy in the top ranks of European Union countries in terms of transfers as a percentage of the average wage. From 20th place in 2015, Poland now ranks fourth behind France, Hungary and Austria.

Now, a fresh study published by PwC puts the country's recent splurge on family policies into European context. 

Beyond electioneering and largesse amounting to almost 40 percent of the country's planned 2017 budget deficit, there's a rationale behind such a surge in state generosity: Like many of its European neighbors, Poland's demographic outlook isn't bright.  

If current Polish birthrates were to continue amid a trend of emigration, the population would shrink by 13.5 percent to around 33 million by 2060 -- not a great signal for the economy. At the moment, Poland's fertility rate is second to last among EU members.

The benchmark for officials seeking to encourage citizens to have children is France, where the population is forecast to increase by the same amount as Poland's will shrink over the next three and a half decades. France is also the only EU nation with a birthrate consistent with a stable population. 



It won’t be quick and easy to emulate France's child-friendly policies though, according to the PwC study. The French example shows that cash handouts are just one element in a complex fabric combining tax incentives, extended parental leave and bonuses for bigger families.

“It’s worth investing in having more children," says Joanna Narkiewicz-Tarlowska, co-author of the PwC study on Poland. “If forecasts on population decline materialize, the effects will be catastrophic.”

1478073762_benchmark logo
Before it's here, it's on the Bloomberg Terminal.
LEARN MORE