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Most fertility-encouraging policies that I've seen pay the same amount of money for the 1st/2nd/3rd/etc child. However it seems like a more efficient policy would pay exponentially larger amounts of money for every additional child, so the structure would look like:

  1. First child: $1k
  2. Second child: $2k
  3. Third child: $4k
  4. ...
  5. Tenth+ child: $512k

This would push parents to have more children, as each subsequent child would be cheaper to raise than the previous one. But the vast majority of parents would not end up having 10+ children, so this should be sustainable for the state budget. Have there been any discussions of a similar proposals in countries suffering from low fertility rates?

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    But the vast majority of parents would not end up having 10+ children You sure about that, given the exponentially increasing rewards?
    – Allure
    Dec 12, 2022 at 23:34
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    It's a good idea. But does that really address the actual problem of why people are not having kids? From what I have observed, offline and online, people don't want to have more kids because they feel they can't afford to raise them (provide a good quality of life consistently) and they feel it it is too time consuming and stressful (they can't enjoy their youth). Any government policy needs to address these issues by considering income, free education and health care and housing as more important factors over 1 time payments. And also reduce the influence of the consumerist culture.
    – sfxedit
    Dec 13, 2022 at 7:09
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    @JonathanReez No matter what you think about the basic biology, 10 children was almost the norm not so long ago (some centuries ago). Few of them survived to have their own children, but in 2022 things are different.
    – fraxinus
    Dec 13, 2022 at 9:11
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    Don't have time for a detailed answer, but check Hungarian policies. As an example, here's the description of tax reduction after children (in Hungarian, sorry). The table in the middle shows tax basis reduction and the resulting tax change per child. For 1-2-3 children, it's 10-40-99 kHUF/month. There are other incentives & policies with a similar logic.
    – molnarm
    Dec 13, 2022 at 9:52
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    That would create an environment where a not inconsiderate number of people would have many children to get bonuses and neglect those children to enjoy as much of the money with themselves.
    – TurtleTail
    Dec 13, 2022 at 18:24

3 Answers 3

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The starting assumption is not necessarily true. France for example has special rules for "familles nombreuses", which kick in on the 3rd child.

Ce dernier est réservé exclusivement aux familles d’au moins 3 enfants à charge.

...reserved to families with at least 3 dependent children

I'd also add that, while the replacement rate is 2.1 it might not be optimal to have 4 childless couples and a 10 child family. Not going to be a child outcome specialist here, but that feels problematic.

For smaller families, say 2-3, this grant is almost negligible over a child's lifetime, so it doesn't incentivize the average family much.

Last, with this kind of scheme, you'd risk developing a whole class of people who have children to... get the grant. That seems like a horrible idea for the society as a whole, especially if it becomes cross-generational. From the parents' perspective however, it would be a rational response to an extremely skewed economic incentive.

This not to criticize any and all schemes to support parents. Just this particular approach has a lot of obvious holes in it.

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    isn't it just specialization of labour? Dec 14, 2022 at 9:50
  • @user253751 Not unless the sociodemographic outcome is the same. How likely are 2 parents to put all 10 of their children through college for example? Dec 14, 2022 at 17:33
  • well that depends on whether the economic system is set up to prevent children from going through college as a punishment for their parents having too many children. I think if we are talking about idealistic systems, and not the status quo, one of the first things we should change from the status quo is that we shouldn't punish children for things their parents do. Dec 15, 2022 at 8:48
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    @ItalianPhilosophers4Monica if we’re talking about Europe then “going to college” isn’t seen as the only good outcome in life, plenty of good jobs for those without a degree. Dec 15, 2022 at 15:10
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has the Kindergeld, an allowance for the parents/legal guardians of children to help them cover the costs of raising the next generation. At times, this was partly exponential, with DM 50 for the first child, DM 100 for the second child, DM 200 for the third and subsequent children. Nowadays it is more level.

Also, child tax credits coupled with progressive income tax and other tax credits can provide a similar effect, where each additional child creates greater tax savings.

Neither Kindergeld nor tax credits come close to the true costs of raising a child, of course.

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  • I like that this answer addresses the primary motivation behind most child benefit schemes i.e. child welfare, not natalism as the question assumes. Dec 13, 2022 at 14:18
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    @CharlieEvans, if that was the case, it would be means-tested. As it is, child benefits in Germany have the highest absolute value for those who pay the highest tax rate, i.e. wealthy people.
    – o.m.
    Dec 13, 2022 at 16:22
  • Means testing adds to the complexity of the scheme. If you simply want to guarantee that a child's family has sufficient income to support that child, then a flat payment is the easiest way to do it. Dec 13, 2022 at 16:31
  • Re. means testing. Normally a huge fan of the practice. With parenting however you run into a problem - society benefits from having enough children. But parents have to make sacrifices. So people can opt out, which comes at a cost to society. Countries want professional well educated women - those most likely to put off/not have children due to career concerns. Contrast that with housing: a well-off person can afford it what's clearly to their benefit. Ditto education - self-interest sees to it. Self-interest is less clear wrt kids and means testing will discourage mid class folk. Dec 13, 2022 at 19:14
  • @ItalianPhilosophers4Monica yes, an alternative proposal would be to keep the doubling but make the benefit payable in terms of a yearly tax deduction. So someone like Elon Musk will be incentivized to have 20+ children so that he doesn’t have to pay tax while a low income family would get no subsidy at all. Dec 15, 2022 at 20:14
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The math doesn't work out. We'll use the USA as a baseline; all numbers below are for that country and currency.

Take your scheme:

First child: $1k

Second child: $2k

Third child: $4k

...

Tenth+ child: $500k

The average annual salary in the US is about $95k/year. $500k is many times more than that. When you earn $500k for having a child, then both father & mother can reasonably retire and be full-time parents. Sure, having children is hard, but you are earning ~5x what you might earn otherwise - that kind of disparity is going to be hard to turn down.

The only way I can see this not working is if it is biologically impossible to have 10+ children, but a quick Google search indicates that the average woman can have ~15 children in their lifetime.

If we assume children 1-9 pay $500k in total and children 10-15 provide $500k each, then the family earns $3.5 million from having children alone. That's comparable one's possible lifetime earnings, assuming 35 years in the workforce.

So yeah: the assumption that the vast majority of parents will not have 10+ children given exponentially-increasing rewards is a flaky one. By extension, the assumption that the government budget will be sufficient to support the payout is also highly shaky.

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    You can't really compare the salary for a 40-hour week with the payment for having 10 children requiring round-the-clock care. It might be instructive to consider if it was enough money to employ nannies for all the kids.
    – Stuart F
    Dec 13, 2022 at 14:42
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    @StuartF, I've known a number of families with 6-10 children, none of whom had any nannies. The older children (can) get childcare responsibilities earlier and to a greater degree than contemporary upper-middle-class western families are accustomed to. Dec 13, 2022 at 18:50
  • @user4556274 spoiled coastal elite parents need a nanny for just 1 kid. Meanwhile in Utah Mormon families raise 10 kids without any Nannie’s whatsoever and all the kids turn out fine. Dec 15, 2022 at 15:12

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