Ukraine's looming population crisis: Can baby bonuses boost birth rates by 2050?

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Money under the cradle

On August 19, the Verkhovna Rada passed in its first reading a bill that increases cash payments to families in which a child is born. The main part of this decision is increasing the payment for a newborn child from 41,280 hryvnias to 50,000 hryvnias ($1,023 to $1,213).

The increase may be modest, but if previously the first tranche was 10,320 hryvnias ($250) and then 860 hryvnias ($21) monthly for three years, now the entire amount of 50,000 hryvnias ($1,213) will be paid out at once.

“Results of some studies show that families with children use consumer loans more often than other population groups, meaning they need additional funds. And such assistance is, of course, helpful for them,” says Iryna Ippolitova, senior researcher at the Center for Economic Strategy.

The bill also includes other components. Unemployed pregnant women will be able to receive 7,000 hryvnias ($170) monthly. One of the parents or a grandfather or grandmother who stays home with the child until the age of one will receive a monthly payment of 7,000 hryvnias. If both parents return to work after the child turns one, the family will also be entitled to up to 8,000 hryvnias ($194) per month under the “eNursery” program—this covers costs for kindergarten or a nanny until the child is three. But if one parent stays with the child after one year—for them the state will pay the Unified Social Contribution, so this time will count toward the pension record, but until the child reaches three years old.

“An important aspect is labor-related. The new measures provide payments that can be spent on child care assistance (for example, nanny services). This will allow moms to return to work sooner, which is very important for Ukraine right now. Labor shortages are among the main challenges Ukrainian businesses point to, and the government forecasts a shortage of workers at 4.5 million people in the medium term,” Ippolitova explains.

Parallel programs include the “Baby Bundle” and “School Package,” which may become part of the bill. Currently, the programs are regulated by other acts. The “Baby Bundle” is a set of items for a newborn child, which can be ordered from the 36th week of pregnancy or taken in cash—7,689 hryvnias ($186). The “School Package” is financial assistance of 5,000 hryvnias ($121), which can be spent on purchasing stationery, clothing, and shoes for a first-grader. The list proposes adding books.

As hromadske was told in the Verkhovna Rada's Budget Committee, in 2025, the “Baby Bundle” program costs the state budget 1.5 billion hryvnias ($36.4 million), and next year the amount will be 1.6 billion ($38.8 million). The “School Package” program, in turn, has funding of 1.3 billion hryvnias ($31.5 million) this year. “The programs are funded within the available budget of the Ministry of Social Policy, including funds not used in other budget programs,” the committee said.

Regarding child payments, the current year's budget allocates 9.1 billion hryvnias ($220.7 million) for this—a third of spending on social protection for children and families. But if the bill becomes law, which is highly likely, then in 2026, an additional 29 billion hryvnias ($703.4 million) will need to be found for childbirth payments, parental support, and the “eNursery” program. And if you add the costs for the “Baby Bundle” and “School Package,” that's already about 32 billion hryvnias ($776.2 million). In other words, spending on family support will essentially need to be doubled amid conditions where social spending has been cut in recent years. Currently, such spending is funded by international aid.

“The government's task is to study the effectiveness of such programs and modernize tools in a way that truly helps people,” says MP Roksolana Pidlasa, head of the Rada's Budget Committee.

Experts have their doubts about the effectiveness of these programs. “We shouldn't expect a significant increase in birth rates due to increased social payments for children. The increase in child payments in 2005 or the introduction of the ‘Baby Bundle’ in 2018 did not lead to significant changes in birth rates,” notes Iryna Ippolitova, senior researcher at the Center for Economic Strategy.

Child payments did become important assistance for families in 2005, during President Viktor Yushchenko's tenure. At that time, he increased the payment from 846 hryvnias to nearly 8,500 hryvnias. At the then exchange rate, that's over $1,600. In addition, payments for the second and third child were increased. In 2008, the payment for the first child was $2,520, for the second—$5,155, for the third and each subsequent—$10,310.

Now, after the increase, the payment will be only $1,220, and it does not matter if it is the first or third child—a general rate applies.

“Current family support should be welcomed, but it won't affect birth rates,” believes expert Oleksandr Hladun, chief research fellow at the Institute for Demography. In his view, assistance should be calculated based on the real subsistence minimum for a child and last until age 18. Most EU countries make such payments until 16-18 years old. In addition, monthly payment formats should not be abandoned. “You get a one-time 50,000 hryvnias paid out, and then what? And now 50,000 is not a lot of money,” Hladun adds.

In his opinion, an important component of state support for families with children would be an interest-free loan for purchasing housing based on the principle that if a child appears, the family should get an additional room. Taxes on income for families where children are born can also be reduced.

“We must understand that any payments can create a short-term, temporary effect. If you wanted to have a child and postponed it for a while, and the state offers money for it, then maybe you'll decide to have one. But the best incentive for birth rates is certainty. 50,000 hryvnias don't give you certainty—whether your country, your city, your home, your job will exist going forward,” believes Olga Dukhnich, head of the Demography and Migration division at the Frontier Institute.

But Pavlo Kukhta, former acting minister of economy, says that there still are not enough funds for large-scale family support programs, so we should not count on expanding them. “It's understandable that various political forces want to offer something, but it won't work because there's no resource. All resources will go to the war anyway. When missiles and drones are falling on people's heads, all these baby and schoolchild bundles with cashback mean nothing to them. As long as the war continues, these programs won't have a social effect,” the economist says.

“The potential for expanding birth rate support programs is extremely limited, since every additional hryvnia of domestic revenue goes to the army's needs, and international funding is limited,” adds Oleksandra Myronenko, economist at CES.

Ukraine’s demographic quagmire

In September 2024, the Cabinet of Ministers approved the Demographic Development Strategy until 2040. It contains a forecast: if nothing is done with demography, leaving everything as is, the population will decrease from 31.1 million citizens in 2024 to 28.9 million in 2040. If active measures are taken, such as a birth rate support program, then in 2040, Ukraine will have 33.9 million citizens.

But the strategy focuses not so much on increasing birth rates as on returning Ukrainians from abroad and attracting foreign migrants, including those coming to Ukraine to study. “The implementation of the strategy has no separate funding. If it has no separate funding, its effectiveness will be small, if any,” says Oleksandr Hladun from the Institute for Demography.

But is it possible to increase birth rates? Experts believe it is an extremely difficult task. “Before the full-scale invasion, there were family studies, and most Ukrainian families were oriented toward a two-child family. But in fact, even then, we had a one-child family model that prevailed,” Hladun notes.

Currently, according to the Institute for Demography, Ukraine's fertility rate is 0.8—meaning ten women give birth to eight children on average, though 22 children are needed to reproduce the population. This is not a unique situation for Ukraine: similar trends of reducing the number of children in families are visible in Europe and developed Asian countries.

“If we look, for example, at European countries, in Germany and France, up to 30% of these countries' birth rates are provided by first-generation migrants. Ukraine doesn't have such a migration wave that could provide and compensate for citizens' birth rate problems,” explains Olga Dukhnich from the Frontier Institute.

The biggest drop in Ukraine's birth rate occurred either against the backdrop of economic instability in the 1990s or due to the start of the war with Russia in 2014 and the full-scale invasion in 2022. During Ukraine's independence, birth rates grew during relatively calm and economically prosperous years from 2002 to 2012, CES explains.

In 2010-2013, Ukraine's fertility rate was 1.5. Then, Ukrainians who are now 35-45 years old became parents. This is the largest demographic group in present-day Ukraine. Currently, according to the Institute for Demography, a woman becomes a mother for the first time on average at 28, a man a father at 30. And the 20-30 age group is the smallest in today's Ukrainian demography. Accordingly, they cannot have many children because there are few of them.

“Ukraine is urbanizing. The war, most likely, accelerates this process. We see that big cities are growing, and big cities are not prone to high birth rates because they have a leisure culture, many hedonistic values among young people who don't want to spend their time with diapers but want to get pleasure from life,” explains Olga Dukhnich from the Frontier Institute.

“The decline in birth rates is not just a Ukrainian trend. A decrease in the fertility rate is also observed in European countries. The reasons lie in both sociocultural and economic spheres. On one hand, women more often get an education and seek to build careers, so they give birth later and to fewer children. On the other hand, having children significantly increases family expenses. In these conditions, good social support for families with children, availability of medicine, kindergartens, schools, and housing can play a certain role in increasing the number of children. However, the cost of such measures is significant, especially for a country at war,” says Iryna Ippolitova, senior researcher at CES.

Among the main factors influencing a couple's decision to have a child is satisfaction with their living conditions. According to a July study by Gradus and the European Business Association, only 31% of respondents are satisfied with their job, 34% are dissatisfied, and 35% are neutral toward it.

86% consider their income level insufficient. Only 33% are satisfied with the quality of social life (communication, friends, support), 34% are dissatisfied, and 33% rate it neutrally. 68% are dissatisfied with the level of safety in the country. With such indicators, objectively speaking, it is hard to expect an increase in birth rates in the near future.

Or here is another indicator: the cost of housing rental. According to LUN, in Kyiv, a sales consultant has to spend an average of 80% of their salary on housing rental. A cook—57%, cashier—83%, driver—56%, barista—78%. This indicator is also rising across the country.

“In fact, we can fantasize a lot, but in a poor country—and we are a poor country where war is ongoing—you can't do many things. If you look at the rental market overall, you have to work to pay almost your entire salary for rent, and have a little money left for food. And thinking about having children—it's just ridiculous, no one will do it,” says Vasyl Voskoboynyk, head of the Migration Policy Office.

“We have, unfortunately, an unpleasant picture where young people postpone the moment of having children, where young people choose to leave the country, where young people don't understand what will happen tomorrow, and if they don't understand what will happen tomorrow, then what children can we talk about?” Voskoboynyk adds.

The sociological group Rating, together with the UNICEF agency, in May conducted a survey of Ukrainians planning to have children. As it turned out, 67% of potential parents lack access to basic resources for child-rearing support. Only 20% have attended a specialized parenting course at least once. At the same time, 21% of respondents plan to have a child in the near future, another 26% are postponing the decision until the end of the war.

“We shouldn't expect a baby boom after the war,” believes Oleksandr Hladun from the Institute for Demography. “There may be a small compensatory increase in birth rates: people planned to have a child during the war but postponed it until the end. And a younger generation has grown up. So both the young generation and those who postponed will start having children. There will be some increase in birth rates. But this is usually characteristic of the period after every social catastrophe, war, famine, epidemic. It always happens that way, but lasts on average three years. Then all demographic processes return to the trends that existed before the social catastrophe. So a small increase in birth rates may occur, but it won't fundamentally change the situation in the country.”