The Family Federation of Finland Väestöliitto, a COFACE member organisation, has presented the “Baby Fund”, a research-based family policy proposal that is unique at the international level.
The model proposes that a €5,000 share be opened in a fund for every child born in Finland. The funds would become available when that child, as an adult, will have a child of their own. In practice, it would work like a pension fund in reverse.
Väestöliitto has put forward the proposal in response to Finland’s demographic challenges. The Finnish birth rate has fallen by almost one third since the beginning of the millennium, marking one of the sharpest declines in the European Union.
According to the organisations’ findings, the major factor that prevent people from having their first child is the financial uncertainty. High-income Finnish couples are significantly more likely to start a family than low-income couples in the same age group.
“It is not so much a lack of desire, but rather uncertainty that delays or, at worst, prevents starting a family. A baby fund would provide both much-needed financial support and a clear signal: an aging Finland is also investing in children.”
Anna Rotkirch, Research Professor at the Family Federation of Finland.
Under the proposed model, the organisation estimates that the measure could result in more than 15,000 additional births compared to the current situation.
In fact, the Baby Fund is structured on three principles:
- Support is focused on the first child;
- The incentive is large enough to influence family decisions;
- The model encourages people to start families at a younger age.
Other financial incentives have been tried in countries such as Spain, Australia, and Canada. However, the Baby Fund differs significantly from these initiatives because of its cumulative and intergenerational nature.
The organisation pointed out that investing in children should be considered a long-term investment to address the economic challenges associated to the long-term costs of population decline, which is likely to exceed the necessary investments. Moreover, according to Väestöliitto, this long-term approach aims to strengthen solidarity between generations and send a positive message to future generations.
Read more about the intergenerational Baby Fund proposal.
