Latov Y.V., Latova N.V. Russian Pro-Natalist Policy and Its Hidden Dilemma. Russian Journal of Economic Theory. 2021. Vol. 18(3). Pp. 389-402.

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Abstract

The demographic policy of the Russian government, which aims to ‘preserve and increase the people’, combines two qualitatively different approaches to understanding the problem of population decline. Most often, the emphasis is placed on stimulating fertility, although there is also an understanding that it is important to raise the quality of their upbringing and education. While the focus on increasing human capital is economically justified, the desire to increase the birth rate has no such justification. The theory of demographic transition proves that stimulating the birth rate is an erroneous goal. The ‘cash for babies’ policy applied in Russia is based on the conviction that children, even those born in poor and dysfunctional families, inevitably ‘pass’ through the education system and become qualified workers. On the basis of this stereotype, the system of pro-natalist incentives is built in such a way that, in accordance with the law of diminishing marginal utility, it creates stronger incentives for poorer families and is therefore actually aimed at increasing the birth rate primarily in the poor strata, having little effect on middle-class families. Meanwhile, modern theories of social capital and labor market signals prove the limited ability of schools and universities to play the role of social elevators. International studies (in particular, in the USA) shows that state benefits for children of poor and disadvantaged families contribute to the reproduction of a culture of poverty. Therefore, when the Russian authorities provide assistance primarily to low-income and single-parent families with children, they create problems for the future. The study proposes to replace the current policy based on the principle ‘more babies but cheaper’ with a policy aimed at middle-class families and based on the principle ‘less is more’. Thus, an orientation towards stimulating population growth is replaced by an orientation towards fostering human capital