A bona fide baby boom for the Baltics

  • 2004-05-27
  • By Aleksei Gunter
TALLINN - In a society such as Estonia's where the birth rate has fallen dramatically over the past 15 years, it takes more than societal guarantees to solve the population problem. Be that as it may, a reliable welfare system can still serve as a good start.

Case in point: Estonia's parental compensation program, which went into force in January.
Kadri, 29, a Tallinn resident and financial specialist, credits the compensation, which includes the option of staying home, as the reason many of her friends have decided to have a second or third child this year. Kadri herself gave birth to her first child in January.
Indeed, according to Minister of Population Affairs Paul-Eerik Rummo, the program has become so popular that virtually everybody wants in "on the action."
In the beginning of 2004 the pension department offices saw lines of people eager to determine their right for parental compensation. The law, in force since January 2004, made the compensation available for parents with children younger than 11 months.
As a result, from January to April 2004, about 40,000 people, mostly women, have received parental compensation for various periods, according to the ministry. In addition, approximately 2,000 of them also have a source of income that is subject to social tax, which in many cases leads to a recalculation of the compensation.
In fact, the program has become so popular that the official forecast for the year - 400 more babies in 2004 than 2003 - will likely become reality by the first half of the year, said Rummo. The government now expects to see 800 more babies born this year.
"In this respect, we can say with certain optimism that in the first four months of this year we saw 273 more births compared to 2003. Today I have a feeling that this is not a fluke but a new trend," Rummo said in a news conference last week.
He added that, according to experts' expectations, the number of deaths and births in Estonia could equalize by 2030. However, the current action plan covers a period only until the year 2008.
The ruling coalition, which campaigned on the compensation program in the beginning of 2003, last week developed a major action plan in its family programs and approved the population policy.
Rummo briefly described the essence of the population policy as an attempt to "increase the birth rate, prolong life expectancy and achieve an optimal balance of migration."
"By the year 2007 we want to achieve 1.45 babies per every woman of fertility age. This goal is difficult but possible. Today this statistic stands between 1.2 and 1.3," he said.
In Finland, the respective index stands at 1.72, according to Kari Ilmonen, adviser of the Finnish Ministry of Social Affairs and Health.
She said that due to children's rights to municipal day care centers in Finland, women have more options to combine work and family life. The Finnish government also has special programs for fathers, allowing them to dedicate more time to their families.
Still, some experts are skeptical about the net result of the compensation program.
Professor Kalev Katus, head of the demography department in Tallinn Pedagogical University's social science faculty, believes that, from a scientific point of view, the parental compensation will have zero effect on the birth rate.
"The effect of the parental compensation as one measure on the birth rate is close to a zero. This point of view is backed by the experience of many European countries. However, it is a grateful sign of the government's attention to the population development issues," said Katus.
Still, according to Katus' forecast, the birth rate in Estonia could increase over the next three to four years to a maximum of 15 percent among women in fertility age.
The European Population Conference linked Estonia's current population pattern to key problems in the area, which include a low fertility rate, aging population and issues with sexual and reproductive health. In addition, the current decrease could be a result of poorly organized population data processing, Katus said.
He said all these matters must be addressed holistically in order to improve the country's demographic situation.


In addition to Estonian citizens, holders of temporary residence permits with an income subject to social taxes also have a right to receive parental compensation. In total, the monthly transferred payments would amount to 100 percent of the average income received in the last 12 months. The maximum monthly limit is set around 1,300 euros.
Parents of twins, interestingly enough, can only receive full compensation for one child. The other will be eligible for the usual 300 kroons (20 euros) per month.
People can apply for compensation through either the pension department office or online at the citizens' portal - www.eesti.ee. Authorization requires an ID card or an online bank access. Information brochures in Estonian and Russian are available in maternity hospitals and family consultation centers.
The government plans to increase the national child allowance to 5,000 kroons as of 2006. Today, a number of municipalities pay lump-sum allowances to parents of newborn babies. The Tallinn city government, for instance, pays 5,000 kroons, while the Tartu municipality pays 7,000 kroons.

Estonia's new demographics*

April 20041,186/1,464
April 20031,100/1,545

March 20041,290/1,592
March 20031,083/1,716

Feb. 20041,043/1,562
Feb. 2003925/1,424

Jan. 20041,035/1,788
Jan. 20031,173/1,949

Dec. 20031,036/1,803

Balance, Jan-April 2004: 1,852
* the birth rate started to drop
dramatically in 1988, when 25,000
births were registered. From 1996
appr. 13,000 babies have been born
each year.
Source: Interior Ministry