Traditional fears about demographic trends have often centered around uncontrolled population growth in countries like China, but as recent statistics have shown, even population heavyweights like China face rapid depopulation.
Europe has become an ‘old continent’ with an aging population and fertility rates in most countries dropping well below replacement level with no signs of recovery. It is no wonder Europe has fallen behind in innovation and competition, as both require vital younger generations.
Europe faces the danger of reaching a point of no demographic return as accelerating population decline, an aging populace, and persistently low birth rates converge. Due to the embrace of mass migration by much of Europe, this challenge is civilizational, too, as the continent now faces the dark prospects of their civilizations’ death or replacement.
Before giving up hope, however, it is important to understand the dilemma—or rather, the trilemma, as British demographer Paul Morland has pointed out—that governments face today, and the consequences of the strategies chosen to fight population decline.
This trilemma, known as ‘the impossible trinity,’ posits that a country cannot simultaneously have low fertility, homogeneity, and economic prosperity. For example, Japan, which has low fertility and limited migration, faces a worsening old-age dependency ratio and severe economic problems. However, the traditional family model that supported higher fertility rates has been undermined by modern lifestyles.
So how can any government hope to cut this Gordian knot?
Since 2010, the Hungarian government has developed one of the most innovative and well-developed long-term strategies to address the demographic crisis. Hungary has embarked on an ambitious endeavor to develop an effective family policy to halt population decline, placing families at the center of its political vision.
The cornerstone of this vision is that a strong Europe must be made up of strong nations, and a strong nation must be made up of strong families.
Whereas Hungary’s previous liberal governments addressed social inequalities through increased welfare, the current administration focused on building a work-based economy grounded in “jobs, not welfare.” This is reflected in a range of family-centered policies designed to strengthen households and encourage child-rearing. Measures include increasing the income of families, supporting the financial independence of young Hungarians through work, and helping mothers reenter the workforce. Tax credits, subsidies, home loans, and expanded crèche services make it easier to start a family and balance work and parenting. At the same time, the government honors stay-at-home motherhood, ensuring that women who view motherhood as their primary vocation are equally supported.
Between 2010 and 2021, Hungary saw several demographic indicators significantly improve. The fertility rate rose from 1.23 to 1.61, maintaining or slightly increasing the birth rate despite a drastic decline in the number of women of childbearing age. Marriage rates have nearly doubled, while abortions have dropped by almost 50%. Hungary’s family policy is a clear example of successful right-wing governance worth emulating.
It must be acknowledged that the increase in the birth rate after 2010 was also driven by Hungary’s economic performance. Wages rose significantly, and together with expanding family support, this greatly improved families’ financial stability. Between 2010 and 2014, foreign currency debts were converted into local currency, easing the burden on Hungarian households, while housing costs became predictable and stayed low thanks to reduced utility expenses. A consumer protection framework was established in the credit market, and lending rates remained low.
However, we cannot overlook Hungary’s comprehensive family policy support system for those who have, want, or plan to have more children. Hungary’s family policy package includes family tax benefits, childcare allowance for mothers attending university, baby bonds, prenatal subsidized loans, and reduction or subsidies for student loans for first-time parents. Access has been made more flexible: mothers continue to receive support even if they go back to work, and support is now available to fathers. Early retirement for women after 40 years of employment and the reform and expansion of the crèche system are further measures helping reconcile work and family life. The benefit system also supports homeownership through grants and VAT rebates, as well as assistance for disadvantaged families such as single-parent households.
Despite these successes, Hungary has yet to reach the target fertility rate of 2.1 and continues to face a smaller number of women of childbearing age.
Although Hungarian family policy primarily supports the traditional family model, it also addresses the prevailing consumerist and individualistic culture that promotes singlehood. To address this, the policy aims to reaffirm the value of motherhood through a range of initiatives thoughtfully designed to meet the specific challenges faced by Hungarian women. In the modern world, many women struggle to balance professional ambitions with family planning, often postponing childbirth, a choice that can lead to having fewer children than desired.
Hungarian policy does not impose social roles on women but ensures they can start and raise families without financial penalty. It incentivizes childbearing while supporting women’s choices. Those who wish to return to work can do so with the help of programs like expanded crèche services, while those who prefer to stay home with their children receive substantial financial support. Mothers can remain at home for up to three years after childbirth while receiving their full gross salary for the first six months.
It is also crucial that the entire country fosters a family-friendly environment. This is supported by initiatives such as the Family-Friendly Workplace Award, which recognizes companies that promote a family-friendly workplace culture.
Although Hungary’s family policy has been developed for 15 years, it is by no means finished. 2025 presented new and complex challenges for young people and families. The war in Ukraine and associated economic challenges have shaken families’ security, already apparent in several key fertility indicators. For this reason, the family-friendly approach and the sustained prioritization of family policy continue to occupy a prominent place in Hungary’s political agenda.
One of the most notable developments in 2025 was the family-friendly ‘tax revolution.’ According to current plans, the 2026 state budget will earmark 5% of Hungary’s GDP for family support programs.
In 2025, the family tax allowance was increased in two stages. From July, the monthly allowance rose by 50%, followed by a further increase in January 2026. In October 2025, a personal income tax exemption was introduced for mothers with three children. For mothers with two children, the exemption is being phased in gradually, beginning in 2026 for those under 40, in 2027 for those aged 40 to 50, in 2028 for those aged 50 to 60, and in 2029 for mothers over 60. The exemption is granted for life and is independent of income level.
Since January 2023, mothers under 30 have benefited from a personal income tax exemption up to the tax payable on the average wage, applicable until they reach the age of 30. In 2025, the government decided to remove the linkage to the average wage from January 2026, extending full personal income tax exemption to the total income of mothers under 30.
Hungarian family policy rests on three core pillars. Alongside financial security, it prioritizes access to adequate housing and the promotion of work-life balance. Launched in September 2025, the Otthon Start Program supports young people in acquiring their first home. The state-subsidized housing loan offers a fixed interest rate of 3%, a maturity of up to 25 years, and 10% down payment. It is also available to young people who have not yet started a family.
Demographic changes are strongly shaped by the social and cultural circumstances of younger generations: childbearing is increasingly postponed to later stages of life, while relationship and housing insecurities have become defining experiences for young people over the past two decades. Rising living costs and the pervasive sense of uncertainty shaping the generational experience of youth have been further intensified by the pandemic and the war in Ukraine. Taken together, these factors have made family formation no longer a natural or self-evident part of youth.
Improving the circumstances of individuals of childbearing age is no longer a personal concern but a broader social and economic issue. The role of family policy must extend beyond classical welfare measures; it must provide young people with a predictable life path and existential security to facilitate childbearing plans. Accordingly, the family policy developed by the Hungarian government goes well beyond the incentivization of childbearing. Its measures are a response to the life circumstances of young people.
The demographic fight in Hungary is far from over, but other countries must learn from Hungary and develop similarly ambitious programs to save Europe from extinction or replacement.
Carrying The Fire: Hungary’s Ongoing Fight Against Demographic Collapse
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Traditional fears about demographic trends have often centered around uncontrolled population growth in countries like China, but as recent statistics have shown, even population heavyweights like China face rapid depopulation.
Europe has become an ‘old continent’ with an aging population and fertility rates in most countries dropping well below replacement level with no signs of recovery. It is no wonder Europe has fallen behind in innovation and competition, as both require vital younger generations.
Europe faces the danger of reaching a point of no demographic return as accelerating population decline, an aging populace, and persistently low birth rates converge. Due to the embrace of mass migration by much of Europe, this challenge is civilizational, too, as the continent now faces the dark prospects of their civilizations’ death or replacement.
Before giving up hope, however, it is important to understand the dilemma—or rather, the trilemma, as British demographer Paul Morland has pointed out—that governments face today, and the consequences of the strategies chosen to fight population decline.
This trilemma, known as ‘the impossible trinity,’ posits that a country cannot simultaneously have low fertility, homogeneity, and economic prosperity. For example, Japan, which has low fertility and limited migration, faces a worsening old-age dependency ratio and severe economic problems. However, the traditional family model that supported higher fertility rates has been undermined by modern lifestyles.
So how can any government hope to cut this Gordian knot?
Since 2010, the Hungarian government has developed one of the most innovative and well-developed long-term strategies to address the demographic crisis. Hungary has embarked on an ambitious endeavor to develop an effective family policy to halt population decline, placing families at the center of its political vision.
The cornerstone of this vision is that a strong Europe must be made up of strong nations, and a strong nation must be made up of strong families.
Whereas Hungary’s previous liberal governments addressed social inequalities through increased welfare, the current administration focused on building a work-based economy grounded in “jobs, not welfare.” This is reflected in a range of family-centered policies designed to strengthen households and encourage child-rearing. Measures include increasing the income of families, supporting the financial independence of young Hungarians through work, and helping mothers reenter the workforce. Tax credits, subsidies, home loans, and expanded crèche services make it easier to start a family and balance work and parenting. At the same time, the government honors stay-at-home motherhood, ensuring that women who view motherhood as their primary vocation are equally supported.
Between 2010 and 2021, Hungary saw several demographic indicators significantly improve. The fertility rate rose from 1.23 to 1.61, maintaining or slightly increasing the birth rate despite a drastic decline in the number of women of childbearing age. Marriage rates have nearly doubled, while abortions have dropped by almost 50%. Hungary’s family policy is a clear example of successful right-wing governance worth emulating.
It must be acknowledged that the increase in the birth rate after 2010 was also driven by Hungary’s economic performance. Wages rose significantly, and together with expanding family support, this greatly improved families’ financial stability. Between 2010 and 2014, foreign currency debts were converted into local currency, easing the burden on Hungarian households, while housing costs became predictable and stayed low thanks to reduced utility expenses. A consumer protection framework was established in the credit market, and lending rates remained low.
However, we cannot overlook Hungary’s comprehensive family policy support system for those who have, want, or plan to have more children. Hungary’s family policy package includes family tax benefits, childcare allowance for mothers attending university, baby bonds, prenatal subsidized loans, and reduction or subsidies for student loans for first-time parents. Access has been made more flexible: mothers continue to receive support even if they go back to work, and support is now available to fathers. Early retirement for women after 40 years of employment and the reform and expansion of the crèche system are further measures helping reconcile work and family life. The benefit system also supports homeownership through grants and VAT rebates, as well as assistance for disadvantaged families such as single-parent households.
Despite these successes, Hungary has yet to reach the target fertility rate of 2.1 and continues to face a smaller number of women of childbearing age.
Although Hungarian family policy primarily supports the traditional family model, it also addresses the prevailing consumerist and individualistic culture that promotes singlehood. To address this, the policy aims to reaffirm the value of motherhood through a range of initiatives thoughtfully designed to meet the specific challenges faced by Hungarian women. In the modern world, many women struggle to balance professional ambitions with family planning, often postponing childbirth, a choice that can lead to having fewer children than desired.
Hungarian policy does not impose social roles on women but ensures they can start and raise families without financial penalty. It incentivizes childbearing while supporting women’s choices. Those who wish to return to work can do so with the help of programs like expanded crèche services, while those who prefer to stay home with their children receive substantial financial support. Mothers can remain at home for up to three years after childbirth while receiving their full gross salary for the first six months.
It is also crucial that the entire country fosters a family-friendly environment. This is supported by initiatives such as the Family-Friendly Workplace Award, which recognizes companies that promote a family-friendly workplace culture.
Although Hungary’s family policy has been developed for 15 years, it is by no means finished. 2025 presented new and complex challenges for young people and families. The war in Ukraine and associated economic challenges have shaken families’ security, already apparent in several key fertility indicators. For this reason, the family-friendly approach and the sustained prioritization of family policy continue to occupy a prominent place in Hungary’s political agenda.
One of the most notable developments in 2025 was the family-friendly ‘tax revolution.’ According to current plans, the 2026 state budget will earmark 5% of Hungary’s GDP for family support programs.
In 2025, the family tax allowance was increased in two stages. From July, the monthly allowance rose by 50%, followed by a further increase in January 2026. In October 2025, a personal income tax exemption was introduced for mothers with three children. For mothers with two children, the exemption is being phased in gradually, beginning in 2026 for those under 40, in 2027 for those aged 40 to 50, in 2028 for those aged 50 to 60, and in 2029 for mothers over 60. The exemption is granted for life and is independent of income level.
Since January 2023, mothers under 30 have benefited from a personal income tax exemption up to the tax payable on the average wage, applicable until they reach the age of 30. In 2025, the government decided to remove the linkage to the average wage from January 2026, extending full personal income tax exemption to the total income of mothers under 30.
Hungarian family policy rests on three core pillars. Alongside financial security, it prioritizes access to adequate housing and the promotion of work-life balance. Launched in September 2025, the Otthon Start Program supports young people in acquiring their first home. The state-subsidized housing loan offers a fixed interest rate of 3%, a maturity of up to 25 years, and 10% down payment. It is also available to young people who have not yet started a family.
Demographic changes are strongly shaped by the social and cultural circumstances of younger generations: childbearing is increasingly postponed to later stages of life, while relationship and housing insecurities have become defining experiences for young people over the past two decades. Rising living costs and the pervasive sense of uncertainty shaping the generational experience of youth have been further intensified by the pandemic and the war in Ukraine. Taken together, these factors have made family formation no longer a natural or self-evident part of youth.
Improving the circumstances of individuals of childbearing age is no longer a personal concern but a broader social and economic issue. The role of family policy must extend beyond classical welfare measures; it must provide young people with a predictable life path and existential security to facilitate childbearing plans. Accordingly, the family policy developed by the Hungarian government goes well beyond the incentivization of childbearing. Its measures are a response to the life circumstances of young people.
The demographic fight in Hungary is far from over, but other countries must learn from Hungary and develop similarly ambitious programs to save Europe from extinction or replacement.
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