German Family Policy Has a Positive Effect on Birth Rates

Without the existing government-funded support for families, the number of births in Germany would be notably smaller. This is the result of a recently published study conducted by the Centre for European Economic Research (ZEW), Forschungszentrum Familienbewusste Personalpolitik (FFP), the Hamburg Institute of International Economics (HWWI) and researchers from the universities of Cologne and Duisburg-Essen.

According to the researchers involved in the study, in particular three family policy measures have a positive impact on birth rates: government funding for childcare, parental leave benefits, and child benefits. The major effect of the child care infrastructure is that fewer women decide to have no child at all. The primary positive effect of parental leave benefits and child benefits on birth rates is that these instruments make it easier for parents to have another child.

The findings of the study highlight that the reconciliation of work and family life is a key factor for the realisation of the desire to have children. For this reason, the authors of the study consider two major family policy measures to be poor instruments: the co-insurance of spouses in the public health insurance system ("beitragsfreie Mitversicherung") and income tax splitting, which allows spouses to pool and equally divide their income to determine tax liability ("Ehegattensplitting"). Neither of them has any effect on birth rates in the simulations, but they impede an equal division of labour between parents and thus increase families' financial risks.

The study was carried out within the framework of the "Overall Evaluation of Family-Related Benefits" on behalf of the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth and the Federal Ministry of Finance. The overall evaluation examined the impact of major family-related benefits on several family policy objectives in Germany. The objectives include economic stability of families, the reconciliation of work and family life, and child development, but also the realisation of the desire to have children and an increase of the birth rate.

For more information please contact

Prof. Dr. Holger Bonin, Phone +49/621/1235-151, E-mail bonin@zew.de

Dr. Holger Stichnoth, Phone +49/621/1235-362, E-mail stichnoth@zew.de