The birth rate in Ukraine is decreasing at a catastrophic rate, says analyst Anatoly Amelin. But what is the government doing to save the situation, apart from declaring that it wants to see three children in each family?
The Prime Minister wants to see three children in every family... But at what cost?
I would also like to see Ukrainians as a growing nation, but there are nuances.
Each such family should have a financial reserve of $300,000 (!) for three children just for their upbringing.
A few years ago, we conducted a study called "Unborn Economic Growth", in which we answered why Ukrainians do not want to have children.
It is banal, unprofitable.
- A woman who gives birth to a child loses her job and income. Loses career prospects and becomes dependent on her husband.
- Family incomes are falling and expenses are rising.
- On average, raising a child from birth to adulthood in Ukraine costs at least $80,000. In Kyiv and regional centers, the figure is more than $100-$200,000.
I already have many married couples who have decided that they will be child free (life without children).
What about the birth of children to the state?
- as written above, raising a child costs money. And considerable;
- this is food, clothing, medicine, kindergartens, recreation, school, courses, universities... this is all consumption and contribution to the Ukrainian economy;
- that is, speaking in economic terms, local business and the budget benefit from population growth and consumption growth, which receives taxes from business and consumers (income tax from companies and VAT from each consumer retail purchase);
- and when the nation grows and children grow up, they are included in the creation of GDP for the country and fill the budget.
Everyone wins, except the parents who really want to have children, but… for them it's just a problem.
In 2000, for comparison, 385,100 children were born in Ukraine.
In 2023, there will be only 187,400 children
The trend is obvious.
During the great war, according to various estimates, about 2 million children left Ukraine, many of whom are already studying for free in schools or European universities (with low chances of returning).
Everything is very, very bad for the future of the nation.
There is only one way out of the situation.
In essence, the reproduction of the nation and the growth of the Ukrainian population is our joint task and one of the most important points of the new social contract.
What can and should such a contract provide for?
1. Well, at a minimum, coverage of 50%-80% for raising a child, namely $50-$80 thousand for a period of 18 years, and not only $1 thousand for the first three years, as it is now (41,280 hryvnias, regardless from the number of children in the family, immediately 10,320 hryvnias, and the rest - 860 hryvnias each month, for 36 months). The proposed sum of 50,000 for 18 years is only $230 per month, which is not very much, but will be a significant support for ordinary Ukrainian families. It will be $2.8 thousand per child per year for the budget. Or +$0.5 billion for 200,000 newborns per year (or $0.3 GDP). And all these funds are the growth of the Ukrainian domestic consumer market.
2. Maternity leave should cease to be a "vacation" for mothers, but should become a new specialization with salary preservation at the level before going on maternity leave for 1.5 years.
3. Half of the expenses for raising children must be covered either by a subsidy, or by a tax credit (with a refund of taxes from the budget at the end of the year), or by reducing taxes for parents. For example, upon the birth of 1 child, the personal income tax of the parents is reduced from 18% to 10%. At the birth of the second — up to 5%. At the birth of three - 0% (EUV in this case and VAT on consumption will not go anywhere).
4. Parents should receive maximum support not directly with money, but with compensation for expenses incurred. Plus the maximum assistance for preserving parents' ability to work and create GDP for the country and pay taxes. Coverage of expenses for:
- kindergartens Who should work from 7:30 a.m. to 8:00 p.m., helping parents work full-time if necessary;
- health insurance and coverage of quality private medicine;
- full-day schools with meals;
- developmental courses and programs (languages, sports, programming and other skills) - this can be at every school;
- higher education for the best students (a voucher that covers studies at a selected private or public Ukrainian university);
- children's development camps (sports or with in-depth study of languages, mathematics, practical skills).
5. Preferential loans for the expansion of living space or partial subsidization of housing costs. Raising three children in a one-room apartment or in a mobile home is another challenge.
And it will be right.
Parents should be able to maintain their social activity, pursue a career — and children should not be the anchor that throws them to the sidelines of a comfortable life.
Does Shmyhal have such a program?
But the draft law, registered in the parliament, again proposes the killing of any motivation:
- for the first child: will be equal to an amount multiple of 150 of the subsistence minimum - 384.5 thousand hryvnias;
- for the second child: a multiple of 100 of the subsistence minimum — 256.3 thousand hryvnias;
- for the third and each subsequent child — a multiple of 50 of the subsistence minimum — 128.2 thousand hryvnias.
That is, $20,000 for three instead of $300,000.
Don't you think they are trying to divorce someone?
