A short podcast-style conversation (Conversations with Jim Penman) discussing Hungary’s extensive financial incentives to raise fertility under Viktor Orbán and arguing they are ineffective. Jim Penman contends monetary incentives have little impact on fertility—attitudes, cultural norms and values drive childbearing decisions—and suggests reinforcing traditional, family-oriented communities and funding basic neuroscience research to change underlying attitudes.
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So welcome to another episode of Conversations with Jim Penman where we're talking about birth rate crisis and other things about happiness and success and other interviews that don't make it onto the Jim's podcast. So what we're going to do now, Jim, is going to ask you a question specifically because I saw this one come up in my feed about Hungry Now, Victor Orban over there. Obviously they're trying to increase the birth rate and they're trying a lot of different incentives. So I'm going to read out some of these incentives to you, which they've just introduced. Lifetime tax freedom. So from October 2025, mothers of three children pay no income tax. Mothers of two will follow in 2026, in January, they've got a bigger child alliance. Now family tax relief doubles in two steps in mid-2025 and 2026. There's apparently cheap credit and new zero interest loans to help couples buy or upgrade their homes if they promise children. There's a mortgage shield housing loan interest capped at 5% from April 2025 to cut monthly costs for young families as well. So those incentives, do you think they're going to work or they're not going to work?
Nope, they are absolutely not going to work at all. In fact, from what I've seen, they're spending 5% of their GDP on these things and it's hard, it's not even budging. They've been going up by like 1.5 to 1.6 as far as I can tell.
Well, I'll tell you what the current birth rate is. So full year 2024, birth rate down. Its fertility fell from 1.51 to 1.38.
Yeah. And that's while they've been doing all these things.
Yes.
So they've been given more and more money and having less and less children. And that's because people totally misunderstand why people have children, why they don't have children. Because if you ask a person why they don't have children, they'll typically say, can't afford it. That's the thing, can't afford it. Too expensive to have kids. Cost too much money. I'd rather spend money on other things that I need to have, you know. Now the problem with that is that how many children you have has no relation to how much money you have in practice. Because, for example, you find that in the wealthiest cities, the people with the highest income have the fewest children. You go into the countryside where there's a lower income and you have more children, you have nations with lower income tend to have more children. The only exception really being Israel, which is a prosperous country, which has a fairly high birth rate. So even though people say that it's lack of money, in an absolute sense, it's actually not. And what's really, what really makes the difference is not so much the absolute money, but your priorities, what you want to do with your money.
And the. Yeah, because it hasn't, hasn't really done anything as well. And they've gone, they've gone full out with what they're doing as well. So then what should they be doing? So if you're advising Viktor Orban, what would you be telling him? What it actually works? Because this is just rolled out. So I don't know, I think they're sort of saying, well, let's say the next 12 months, 24 months, if it has any effect on it.
But I'd like to have somebody pay a bet on this one that it.
Will not work, that you will not.
See any significant change. I'm prepared to put up some money on this one. It won't work. They can spend 10% of GDP and it won't work. Because it's a matter of attitude. Now, if you're talking about.
What you.
Can currently do, actually very little, the one thing that you can try and do is reinforce traditional values, because the values that make you want to have children are emotional, psychological. People who have larger families, like the Amish and Orthodox Jews, tend to be highly religious. They tend to have more traditional Orthodox views. So I would be encouraging, if you want to do anything of that nature, I will be encouraging religious communities, for example, helping people to have housing, for example. If you had an environment where it was very family friendly in a community of people who had more children and they sort of emotionally reinforced each other, so become normal in that society. That's what happens with some of these groups like the Amish and so forth, because everybody in their community has larger families. It's normal. Whereas today, if you think you want to have two or even three children, oh, you're a bit strange. And so public opinion, so that's the only thing you could really do. But in reality, there is only one thing that Victor Alban can and should do, and that is to fund basic neuroscience research, which is not what he's thinking of, but it's what we're trying to persuade people. Because in actual fact, if you took a fraction, if you took 1% of the money that Orban's spending on trying to pay people to have more children and put that into the basic neuroscience to change the attitudes behind it. You will cure the problem. The money directly. Card Neuroscience can.
There you go. That's hungry. So if anyone from Victor's team is listening, reach out to us and put him in touch with Jim and we'll sort it out as well. But thank you for today's episode, Jim. We much appreciate it.
