Tax breaks, “Baby Bonuses,” and million-dollar payments: countries struggling with plummeting birth rates are finding creative new ways to get families to have more children. Otherwise, in America and elsewhere, workforces could shrink, federal programs could face cuts, and economies could slow.

Yet according to a Harvard-trained economist, Catherine Pakaluk, throwing money at the problem will fail to fix it. Women can’t simply be bribed into having more children. What’s needed, instead, is a more pro-children culture. 

“Free market solutions are the only ones that stand a chance,” Ms. Pakaluk, herself a mother of 14, tells the Sun. She recently wrote a book on the issue, “Hannah’s Children: The Women Quietly Defying the Birth Dearth.”

President Biden, though, is seeking to expand America’s child tax credit “from $2,000 per child to $3,000 per child for children six years old and above, and to $3,600 per child for children under six,” according to his $7.2 trillion budget request. The legislation is part of his Tax Relief for American Families and Workers Act of 2024, which passed the House on January 31 and is stalling in the Senate. 

Republican lawmakers are also looking for solutions to America’s low fertility rate of 1.62 births per woman in 2023, well below the “replacement rate” of 2.1. Senators Romney, Burr, and Daines have proposed paying families $350 a month for each young child. This plan, called the Family Security Act 2.0, promises to reduce the financial strain on families and encourage marriage, which has fallen to an all-time low in America.

“The child tax credits being considered today might help families who are determined to have children,” Ms. Pakaluk says. “But that’s different from saying you’re going to make people want to run the race.” 

Much of the world is following America’s footsteps. In Hungary, women who become mothers under the age of 30 are now exempt from paying personal income tax for the rest of their lives. In Singapore, parents can receive a “Baby Bonus” of $11,000 for their first and second child, and up to $37,000 in government grants if they have five or more children.

In South Korea, which has the lowest fertility rate in the world, government initiatives include subsidized housing for newlyweds, discounted postpartum care for new mothers, and a “baby payment” program of $2,250 for each newborn. Some companies, like a Seoul-based construction firm, Booyoung Group, are now pledging millions of dollars in bonuses for employees who become parents.

Despite aggressive efforts, South Korea’s fertility rate is on course to sink further to 0.65 by 2025, according to official estimates by Statistics Korea. The demographic crisis is set to cut the country’s workforce in half within 50 years.

Financial incentives to bump up the birth rate pose their own cost. “My read of the fiscal position of countries with low birth rates is that nobody has enough money to throw at the problem,” Ms. Pakaluk says. America could instead learn from a country that has been immune to cratering birth rates around the world — Israel. 

“They have a larger percentage of people who have religiously devout families who believe children are blessings, and that it’s worth taking on these extra sacrifices,” Ms. Pakaluk says. If a substantial minority of the population is forming large families, there can be spillover effects that make the whole culture more family-friendly and inspire more people who are on the fence about having children to go ahead and do it.

In America, organized religion is in a decades-long decline and faith-based education has grown more expensive. “Intergenerational transmission of values is much stronger when parents are working together with churches, which pass on their values to their children,” says Ms. Pakaluk. “Schools are an enormous way in which that channel of passing on faith gets broken.”

To help reverse the inverting pyramid of America’s population, Ms. Pakaluk advocates for giving parents more “educational freedom” in deciding whether to send their children to school, and giving churches a greater role in shaping people’s values. 

“I think religious schooling all the way through college, beyond transmitting values, also has the added bonus of helping kids transition to marriage more quickly.”

If the country moves toward pro-natalist values and away from secularism and “workism,” Ms. Pakaluk predicts, “you could move the needle on birth rates in one cycle of kids.”