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Certain Effects of Family and Home Setup Tax Benefits and Subsidies

Judit Sági, Tibor Tatay (), Csaba Lentner and Ildikó Virág Neumanné
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Judit Sági: habil., PhD, Associate Professor, Budapest Business School, Department of Finance, Budapest
Tibor Tatay: habil., PhD, Associate Professor, Széchenyi István University, Department of Economic Analyses, Gyõr
Csaba Lentner: CSC, University Professor, Head of Institute, National University of Public Service, Institute of Public Finance, Budapest
Ildikó Virág Neumanné: PhD, Associate Professor, University of Pannonia, Faculty of Business and Economics, Veszprém

Public Finance Quarterly, 2017, vol. 62, issue 2, 171-187

Abstract: The population of Hungary has been continuously decreasing in recent decades, along with the developed countries of the world. Research identifies many factors as the cause of demographic processes. The low level of fertility rate is attributable to changing family formation patterns, more years spent in education, and the transformation of family models and life philosophies. The uncertainty of youth employment and the difficulty of housing opportunities appear as economic factors. In our study we examined the tendencies of the willingness to have children and the number of births in Hungary after the millennium. We consider access to housing to be a factor influencing the willingness to have children. That is why we shall review the housing market’s processes following the millennium. It can be seen from the figures that, after the crisis in 2008, there was a steady decline in the number of house constructions. In order to offset this trend, the government launched a home setup program as from 2012. This was expanded in 2015, and during 2016 the conditions for subsidies were further expanded. During the period that had elapsed since its introduction, by the end of 2016, 36,000 families were able to use the family home setup allowance, which amounted to around HUF 87,000 million in one and a half years. In 2016, the beneficiaries agreed in about one third of the concluded contracts to have more children when receiving the subsidy. In an empirical study, we examined whether the intentions of young people entering the age to have children are potentially changed by the existence of the support scheme. In our own questionnaire-based study, there were 1,332 students in higher education involved. According to 73.4 per cent of the respondents, home setup support schemes do increase the desire to have children. 36.7 percent responded that if the support scheme was maintained, they would be willing to have more children themselves. We have found that the home setup support scheme positively influences the desire to have children.

Keywords: fertility rate; family planning; having children; family support; housing construction (search for similar items in EconPapers)
JEL-codes: I38 J13 R21 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:pfq:journl:v:62:y:2017:i:2:p:171-187