IGOR EFREMOV: “THE BIRTH RATE WILL KEEP DECLINING IN 2023”

The government has less than a month left to develop the announced new demographic measures aimed at boosting the birth rate. According to demographic statistics, a natural population decline with a collapse of the birth rate has been registered for about seven years. Based on results of 2021, the natural decline of the population was equal to over 1 mn persons. Based on results of January through October 2022, it amounted to more than 500,000 persons. Though the indicator of January through October 2022 was better as compared with the relevant period of 2021, the trend was not reversed. At year-end 2021, the fall was equal to over 2% year on year. Based on results of January-October 2022, it amounted to over 6% year on year. It is noteworthy that these data were not yet affected either by the partial mobilization or partial emigration: their echo will be distinct nine months after the September developments.

Earlier, Igor Efremov pointed to a decrease in efficiency of maternity capital. As a result of updating the payment mechanism, from 2020 a larger portion of payments is made at the birth of the first child, while motivation for giving birth to a second child in the same family has largely decreased. To promote the efficiency of the maternity capital, the expert advised to return at least the full sum of payment for the second child and introduce the same amount of payment at the birth of a third child. Further, the expert believes that it will be worthwhile to expand the utilization of maternity capital, particularly on the secondary housing market.

Experts of the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) noted that maternity capital’s insufficient efficiency could be explained by the fact that “the applied instruments are primarily aimed at supporting the birth rate at agrarian and agro-industrial regions, while the main problem is concentrated in industrial and post-industrial regions.”

However, Igor Efremov warns that the regional specifics should not be overestimated. “Contribution of agriculture and industry to the pattern of a region’s economy and employment is not of decisive importance to the region’s demographic image. It is noteworthy that the population is diversified nearly in all subjects of the Russian Federation and it would be more reasonable to regard it in center-periphery terms,” Igor Efremov believes. Even with such an approach, some clarifications are needed. “Land plots are quite in demand in developed regions with large cities, too, while childcare support making it possible for women to combine work with motherhood is also required in small provincial towns,” the expert notes.

According to Igor Efremov’s forecast, the birth rate in 2023 will keep falling: “the number of potential mothers will de declining (the echo of the 1990s and the early 2000s when a very small generation was born), but the intensity of births, that is, the number of children on average per a woman of childbearing age will fall as well.” Specifically, early in 2023 the birth rate, by Igor Efremov’s estimates, will de declining “primarily owing to wrong changes made in the demographic policy and financial and economic factors.”

Apart from objective reasons for the deterioration of a demographic situation, “the heaviest blow at the birth rate was probably dealt by a too high level of uncertainty prevailing for almost a year in the life of Russian families of child producing age,” Igor Efremov continued.

“Taking into account a natural lag of nine months, a more dramatic decrease in the birth rate will be observed in H2 2023. Late in 2023 - early in 2024, we are likely to see the lowest annual number of births in the Russian history, even below the crisis minimum seen in 1999,” the expert predicts. Any support measures are good and efficient with varying degrees, but only in a stable situation. Igor Efremov believes that a return to a normal life and regaining of confidence in tomorrow are crucially instrumental in supporting the birth rate.