Global Economics

Macedonia Offers Money for Babies


To slow emigration and bolster the birth rate, the Balkan nation is offering substantial subsidies to families with children

Ana Todorovska and her husband Zoran used to think they couldn't afford to start a family. Now they are not so sure, thanks to a new government program aimed at reversing the dramatic drop in the Macedonian birth rate.

But the couple are not quite ready to take the next step.

"I can't afford to have a baby right now because my job is not stable. We live with Zoran's parents because we don't have enough money to rent or to buy an apartment. We're going to wait a year or two just to see if the government is serious this time and after the money is guaranteed we can think about having babies," the 29-year-old saleswoman says.

Together, the couple earn around 300 euros a month. They began to think seriously about having children when the government in May announced plans to significantly boost financial support to parents. Starting in January, on the birth of their third child, couples will be eligible to receive 50 percent of an average Macedonian salary over the following 10 years, rising to 70 percent of an average salary over 15 years for the fourth child.

First-time parents will receive a one-time payment (the amount has not been decided) and the next child will entitle them to a payment equal to 30 percent of an average Macedonian salary for a period of nine months.

DEMOGRAPHIC COLLAPSE

One aim of the campaign is to stem the country's population slowdown.

Eurostat data show that while in 1996, Macedonia's population of just over 2 million grew by 19,711, the annual growth fell to under 9,000 by 1999. The downward trend continued, with growth of just 3,238 in 2007. In the last two years, 33 of the country's 85 municipalities have recorded more deaths than births, and the number of municipalities experiencing negative growth is rising fast.

One factor influencing demographic patterns is labor migration, whether abroad or to Skopje and other relatively more prosperous parts of Macedonia. Dusko Minovski, state secretary in the Ministry of Labor and Social Policy, says the birth campaign's second major goal is to channel extra parental support to poorer regions to stimulate local development and discourage migration.

Although the campaign is due to launch in four months' time, the government has not worked out how much it will cost or where the money will come from—part of the reason couples like Ana and Zoran are taking a wait-and-see attitude.

Unofficial estimates are that the program will cost the state about 1,000 euros per eligible family per year. The ministry has not said how many families it thinks will be eligible. The average annual wage is around 3,000 euros, according to State Statistical Bureau data.

While Todorovska is thinking of having her first baby to take advantage of the state support, Ana Janeva, 34 and also from Skopje, already has three children and doesn't plan a fourth. She works as a cashier and her husband is a driver for a petrol company. To bring in a little extra for their son and two daughters, she also sells life insurance part time.

"We spend around 250 euros a month for all the basic needs of my children, like kindergarten, food and clothes. But as they grow up, we need more money. My mother helps me a lot. For instance, she buys books and all the necessary things for school for my son. That's why I have to work in shifts and to do extra jobs," Janeva says.

Even though she would be eligible for the highest payments under the new population-building campaign, Janeva doesn't fully support it. She has more practical proposals.

"The government should provide free kindergarten, free school books, and give financial aid for university students. Also, mothers must have free weekends and have a right to go home earlier than other employees. What if the government fails with this project? I can't stay at home and wait for help from the state."

She says she's often discriminated against because she is a mother of three.

"I want to find a better-paying job. But everywhere I go, the first question is, am I a mother and how many children do I have. Why? The employers assume that I'll often take extra vacation because of my kids. But in 10 years of work experience I used extra vacation time only once," she says.

MORE BABIES, NEVER MIND THE COST

Parents will be eligible for the payments regardless of their ethnicity or employment status. The official unemployment rate is around 30 percent.

Even with the unknowns surrounding the policy, Minovski, the Labor Ministry official in charge of the plan, said it must be realized no matter what the difficulties and cost and even though it will be a generation before the positive benefits start to kick in.

"We still don't know how much money we will need from the budget for this campaign, but we will know when we get the statistical data for all newborns next year and then we'll create the budget for this purpose. This is the first time a government has done anything on this issue," Minovski says.

Concern that some parents will abuse the program is one of the few aspects of the population campaign to arouse public debate. One organization that supports the campaign yet also worries about its consequences is the Macedonian Orthodox Church.

"I can understand the government point of view on this question and I fully agree that if we don't do something now, the Macedonian nation will slowly die out in the near future. But as Christians we have a small doubt—parents must have children because they like to have them and to love them, not to look at them as a means [to collect state support]. A child is a gift," says Ivica Todorov, an Orthodox priest.

As Todorov sees it, most Macedonians nowadays choose to have only one child because they are preoccupied with earning money and spend more time working than in the past, leaving much less time for family life.

"We must work to change the Balkan mentality and to strengthen moral and spiritual values. I see the church as an integrative factor in this situation," he says.

A few secular critiques of the plan have also been heard.

"Experience from countries such as Israel, France, Germany, and Scandinavia where childbirth and childrearing are heavily subsidized shows that government intervention is futile and a colossal waste of resources," says Sam Vaknin, a former economic advisor to the Macedonian government.

In the medium to long run, subsidized childrearing programs have insignificant statistical effect, Vaknin says. "In all these countries, despite the fact that these policies are still being implemented, population growth is flat to negative, except in Israel and France which have a lot of immigrants."

The latest Eurostat estimates show that Germany's size will shrink over the next 50 years, while countries with large immigrant populations, including France and Britain, will grow.

Nelko Stojanovski, a sociologist and a professor at Skopje University, concurs with Todorov that the campaign is well-intended, but says it cannot solve the problems underlying the population slowdown. The pressure to earn a living and build a career in the precarious economic situation marked by lack of job creation and small salaries for those who do have work makes it very difficult for many young people to commit themselves to marriage, or to a large family, he argues.

"We like to have many children and to increase the population, but in many Macedonian families we don't have even a first child. We don't have the social environment to raise more children. On the other hand, there are families with three, four or more children but they live in poverty. This is a good campaign, but the government first must provide a better social climate and fulfill all the promises mentioned in the campaign," Stojanovski says.

In Stojanovski's view, Macedonia provides a rare case where socio-economic factors are the biggest contributor to a demographic slowdown. Paradoxically, he believes, it will only get worse if Macedonia achieves its long-sought goal of European Union membership.

Ana Janeva and her husband are already hoping to join the growing ranks of labor migrants. In hopes of a better life elsewhere, the couple applied for a U.S. "green card."

"Normally, we would expect that many young Macedonians will wish to leave the country to live and work abroad, when the situation in the country promises no future for them," Stojanovski says. "That will cause a serious brain drain, but it will have a huge impact on the population too."


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