The intergenerational Baby Fund proposal

The Family Federation of Finland (Väestöliitto), a leading Finnish NGO focused on family policy and population research, presents a proposal under which the state would provide every child born in Finland with a €5,000 investment. According to the Federation’s modelling, the intergenerational Baby Fund proposal could at best generate as many as around 15,000 additional births compared with the current situation. This would mean that, on average, Finns would reach their desired number of children, which is approximately two. Over thirty years, the fund’s investment would have time to grow into a substantial sum.

“Just as the maternity package was born out of a Finnish need and went on to spread around the world, the intergenerational Baby Fund could be the next Finnish family policy innovation to capture international interest,” says Tiina Ristikari, CEO of the Family Federation of Finland and a member of the Baby Fund working group.

Finland’s birth rate has fallen by almost a third since the turn of the millennium, the steepest decline in the EU, driven in particular by first children being born later or not at all. The intergenerational Baby Fund is built on three principles: support is targeted at the first child, the incentive is large enough to influence family decisions, and the model encourages family formation at an earlier life stage. International research literature shows that financial incentives affect fertility in proportion to their size: the larger the incentive, the greater the impact.

Finns want children, but the obstacle is often financial

For many would-be parents, financial uncertainty is one of the main obstacles to having a first child in particular. High-income Finns are considerably more likely to have their first child than low-income Finns in the same age group.

“This isn’t so much about a lack of desire as about uncertainty, which delays the decision or, at worst, prevents family formation altogether. The intergenerational Baby Fund would be both a welcome financial support and a clear signal — while Finland is aging, it is also investing in children,” says Anna Rotkirch, Research Professor at the Family Federation of Finland.

The Family Federation wants to spark public debate around the fulfilment of people’s wishes to have children, and at the same time to build a family-friendly Finland for future generations. Public support currently flows from younger generations to older ones, but future generations also need to be invested in. Investing in children is also economically justified, as the long-term costs of falling fertility clearly exceed the investment required.

Similar financial incentives to boost birth rates have been tried in several countries, including Spain, Australia and Canada, but the intergenerational Baby Fund sets itself apart from these earlier efforts. The accumulation of assets and the intergenerational design make the model truly unique, and its long-term horizon sends a strong, positive signal about the value society places on future generations.

A bold social innovation

The Family Federation of Finland’s intergenerational Baby Fund proposal has been developed in collaboration with Sitra, the Finnish public innovation fund operating under the Finnish Parliament, which has funded the development of the model as part of its work to build a sustainable and adaptable Finland. The proposal rests on the idea that a family-friendly culture does not emerge out of nothing. Finland already has a largely well-functioning family policy in place; what is needed alongside it are new family policy solutions to meet today’s challenges. Sustained societal investment shapes values and culture over time.

“Finland needs the courage to envision and trial new solutions in order to respond to future challenges such as demographic change. The Baby Fund developed by the Family Federation is a bold example of how social innovation can help build a more sustainable future,” says Kalle Nieminen, Director of Solutions at Sitra.

The proposal is intended as a starting point for discussion among policymakers, researchers and anyone interested in building a family-friendly Finland.

Read more about Vauvasampo – The Future Parents Fund Working paper

Read more from Baby Fund website

The Baby Fund working group consists of

• Tiina Ristikari, CEO of the Family Federation of Finland and Adjunct Professor in Child and Family Research
• Anna Rotkirch, Director of the Population Research Institute and Research Professor
• Venla Berg, Senior Researcher at the Population Research Institute
• Jarkko Nissinen, Public Affairs Specialist at the Population Research Institute
• Max Heino, Entrepreneur and Initiator

For further information:

Tiina Ristikari
tiina.ristikari@vaestoliitto.fi
+358 50 917 7396

Anna Rotkirch
anna.rotkirch@vaestoliitto.fi
+358 40 776 3086