The Weblog of Vincent Oberle - Thoughts and opinions about technology and business

Estonia doesn’t want children…

Like most European countries, Estonia is facing a too low birth rate. Considering the small amount of Estonians there are to start with, they are at risk of dying out. This should make Estonia a model on family politics and it appears to be so at first look.

In fact the family policy is pretty much represented by one measure that is the tree hiding the desert. The parental benefit, introduced in 2004, allows one of the parents to take one year of leave, and keep receiving his or her salary.

Sounds great? But the devil is in the details. First the salary you receive currently is not the salary you had just before taking the leave, but the one of the calendar year before. Most people taking these leave are young woman early in their careers, thus the salary taking as a reference is often far lower than the current one. It would be more accurate to say you get around 70% of your salary.

Next the benefit you can get has a ceiling, a maximum of 1230 Euros per month that men have more chances to exceed than women since men have statically a higher salary than women. When looking at the budget of the family, the financial loss is then bigger if the man takes the leave instead of the woman. This rule forces more women to stay at home. In fact a Swedish colleague told me in Sweden they have removed this ceiling for this exact reason.

But the real hole in the family policy comes when the child reaches 15 months, after the maternity and the parental leave. Then suddenly there is nothing anymore. Well, almost nothing, there is a monthly allowance of 20 Euros. Ridiculous. But there are no tax cuts for families. You can deduct the interest of your real-estate loan from your taxes, but if you raise children, nothing. Aren’t children more important to the future of Estonia than apartments? In fact I find this the most shocking. Children are the crucial component in the future of a society and the whole society should participate in their education, including the people who choose not to have any.

Child care, while we haven’t experienced it yet, seems also very poor. First we have to register our child to the kindergarten when he’s born, because there are not enough places. But he can go there only when he’s three. Until then, the options are private nannies (not sure the 20 Euros will be enough to pay her…), family (what if the grandmother doesn’t want to spend her retirement raising again children?) and staying at home. Again the woman is somehow forced to give up her job.

Now I will always be answered that if you want children, you should be ready to make sacrifices, which also means staying at home to raise them. Absolutely, but that’s not the point. For a western society to reach correct birth rates, women must have the choice. Because if you force them to stay at home, too many will decide it’s not worth it and birth rate will be alarmingly low.

In general I found Estonian politicians well inspired, but on family policy they have definitively failed for now.

2 Responses to “Estonia doesn’t want children…”

  1. :)
    July 21st, 2006 23:33

    That’s true Vincent, that’s true ;) From year to year birth rate decreases. And no clear government policy at all.

  2. Hervé
    August 2nd, 2006 00:27

    vincent, try England for child support policy. Litterally there nothing, nada, zip… We’d dream to have this one year salary. I agree with all your comments though, this is appaling and the future of a nation is in his childs (well, at the very least they are the future tax payers aren’t they). And whilst our beloved home nation has got it wrong in many areas, it has to be said that France is doing the right thing for the child support policies and sees the results with one of the highest birthrate in the EU.

    Take care (I like the comparison with tax breaks for real estate, I’ll certainly use it in the future :D )