5,000 Euros Per Baby? One Village In Portugal Is Ready to Pay Up

But will this country's aversion to having babies be overcome by a cash incentive?

The birth rate in Portugal has rapidly declined over the last few years, largely as a result of the financial crisis and its aftermath. Now there are more deaths than births each year and the population is slowly declining and getting older. This has led authorities across the country to try and come up with policies that will encourage young couples to have babies.

Alcouutim, a village in the south-east of the country near the border with Spain, has decided to financially support new parents with a payment of 5,000 euros for every new baby born. The Guardian reports that:

Sun-soaked Alcoutim, in the south-east near the border with Spain, has lost a third of its population over the past 20 years.

Its fertility rate, meanwhile, dropped to one of Portugal’s lowest, at 0.9 children each woman, in a country whose national rate, at 1.21 children each woman, is already the lowest in the European Union, and now cause for national concern.

While Alcoutim’s scheme is not the first of its kind in the country, the amount is the most generous offered and the mayor, Osvaldo Goncalves hopes to attract young people to his village with the promise of payments for babies. It might be too early to tell if the scheme has been successful, but births in Alcoutim have increased by 50 percent from last year (from six to nine, still far below the 1995 level of 23). However, if it continues to increase Alcoutim’s birth rate, then there will be little doubt that the central government will be interested in trying to replicate the scheme across the country. The Guardian notes that:

Lisbon’s centre-right government has been watching the local “baby schemes” and recently introduced several bills into parliament which are designed to help young parents nationwide: longer parental leaves, tax benefits and greater family allowances.

There is good reason for the government to be concerned; if the current decline continues, the country could lose a fifth of its population by 2060 (dropping from 10.5m to 8.6m people) according to Portugal’s national institute of statistics. Whether paying people cash incentives will overcome the nation’s aversion to having babies is debatable. But I’m sure young Portugese parents will welcome any help that they can get. And that the Portugese government will welcome any babies that they can get.

Marcus Robertswrites for Mercatornet.com where this article was first published.