Addressing Low Fertility in a World of 7 Billion: Macedonians Try Financial Incentives

VEVCHANI, The former Yugoslav Republic of Macedonia — This mountain village of tiled roofs and narrow streets dates back to the seventh century. Set in the western region of The former Yugoslav Republic of Macedonia, the village feels barely touched by time.

“Vevchani is a wonderful place,” explains Emilija Popeska, who has lived here all her life. “It has everything you need for a peaceful, quiet life.”

But Emilija has watched the population of Vevchani dwindle to just 2,500 – about half the size of what it used to be.

She worries that Vevchani could be the next victim of a trend that has left empty houses and abandoned villages scattered across the land. “It would be sad if the natural tragedy that has happened to many other Macedonian villages happens to Vevchani as well.”

Low fertility rates and an ageing population

Some fifty years ago, most women had more than four children. Today, many choose to have just one or two. What’s more, the country’s elderly population is rising.

“The decline in the birth rate, along with the problem of an ageing population, has thrown the country’s economy and sustainability out of balance,” says Spiro Ristovski, the Minister of Labour and Social Policy. A report from UNFPA predicts that this country of two million could lose 15 per cent of its population in the next 40 years.

According to Mr. Ristovski, raising the fertility rate – which is currently under 1.5 children per woman – is a necessity for this tiny Balkan nation. “As we are developing a society,” he says, “we cannot afford to lose population.”

With this in mind, the Government has come up with a bold strategy to increase the fertility rate using a powerful motivator – money. In 2008, the Government began paying families to have a third child – 120 Euros per month for ten years, more than a third of the average monthly income in the country.

For Emilija, this offer forced her to question her own priorities. “In the past,” she says, “girls used to marry after high school at 18, and that was it.” As one of the only two women in her village to attend university, Emilia waited to marry until she was 25 years old.

After having two daughters, Emilija landed a job as the finance manager for the local hospital. Her husband, Vlado opened his own business. Then he wanted to have a third child, a boy.

“The most important thing in the family is the birth of a boy,” says Vlado. “ That way there is someone to make money and help support the house.”

But Emilija agonized over the decision to have another child, something she feared could interfere with her pursuit of a more modern lifestyle. Ultimately, however, tradition prevailed, as the government campaign tipped the scales.

“It would be terrible and very sad to forget – to see our heritage erased and destroyed. How could I help?” Emilija wondered. Her answer was simple. “I can give birth to a child,” she says plainly. This year, Emilija did just that -- she gave birth to a boy, Lubcho.

On the other side of the mountains in the capital city of Skopje, however, another woman, Tatjana Loparski, was not persuaded by the government’s financial incentives.

The population in the former Yugoslav Republic of Macedonia is shrinking as people leave for opportunities abroad. Its birth rate has plummeted as women increasingly delay having children in pursuit of education and career.

The economic calculus of childbearing

“Our government thinks that if [it gives] somebody 120 Euros per month, [she’s] going to have a child?” she asks with surprise. “The expenses are much more than 120 Euro.”

An only child herself, Tatjana was accustomed to privilege. She graduated from college with a journalism degree, worked as a TV news anchor, and later as a spokesperson in the cabinet of the country’s President.

A few years ago, she started her own public relations company with ten employees. For her, raising children involves more than just providing their basic needs.

“I want my child to have everything,” she says, such as a good education and a “proper life – to have everything that everybody else has.”

Tatjana sends her only child – a daughter – to a private kindergarten. “It’s not free . . . [but] if you [want your child] to have a college education, you have to give additional money for private lessons.”

The added financial burden of another child now would be too much, she says. She feels lucky to even have a job, pointing to the 35 per cent unemployment.

A recent report from the State Statistical Office shows that the number of families with a third child rose some 13 per cent in just one year. But whether these births are related to the government incentive policy is still too early to say.

A complex problem may require creative solutions

Deciding the size of a family is a complex issue involving many factors, says UNFPA’s Tatjana Sikoska, and should not be exclusively financial. “If you look at the story of Emilija and the story of Tatjana, we would see that the persistence of tradition – the culture which is more prevalent in rural settlements – is a strong pushing factor for women to decide to go for two, three, four or more children.”

Helping communities thrive could be one of the solutions to the country’s population problem and salvation for its dying villages – some 150 of which are entirely abandoned, and more than 450 are at risk of becoming totally empty.

Vevchani Mayor, Pero Leski, hopes that his village can escape that fate. He believes it’s important to both grow the economy – through tourism – as well as to grow the population. He welcomes the government campaign and hopes that the initiative will help raise the village fertility rate to increase the size of the workforce.

As for Emilija, playing her part in preserving the community and heritage of her village is something for which she is proud. She has no regrets about having another baby.

“Once I had Ljubcho, I felt like I had found inner peace,” she says. “Tradition was not built in ten days. It took many years and many generations who passed it on to the future ones.”

A world of seven billion people

With the world's population on the brink of reaching an historic seven billion people, growth is not evenly distributed. While nearly 80 million people are added every year, many countries – especially in Eastern Europe – are losing population.

With an ageing population and a diminishing workforce, it is becoming increasingly difficult for countries like the former Yugoslav Republic of Macedonia, and others in the region, to provide access to health services and special facilities for the elderly.

Nevertheless, the ICPD Programme of Action that guides UNFPA cautions against the use of cash incentives to influence reproductive decisions. It notes that over the past century, many governments have experimented specific incentives and disincentives in order to lower or raise fertility. Most such schemes have had only marginal impact on fertility and in some cases have been counterproductive.

The programme (para 7.22) encourages governments to focus most of their efforts towards meeting their population and development objectives through education and voluntary measures rather than schemes involving incentives and disincentives.

UNFPA is working with governments and key partners in the region by providing technical support at the regional and country level. While building national capacity for providing sexual and reproductive health services, the Fund also offers policy advice to enhance understanding of population dynamics in the Eastern Europe and Central Asia region, as well as the linkages between economic development, population trends, gender equality and sexual and reproductive health.