Spain's €200-per-child payment: the maths that doesn't add up

€200 payments to have children: the maths that doesn't add up

Does a family get started for €200 a month? The Spanish Government is preparing a pro-natalist measure based on direct child payments, ditching the classic route of tax deductions. The idea sounds generous, but scepticism is widespread among those already past thirty: the payment doesn't even cover nursery fees, and nobody with any sense decides to have a child for the sake of a small allowance.

The direct payment and the question of who receives it

The change of format — from a tax deduction to a monthly payment — has an economic logic: it reaches people who don't pay income tax. That angers taxpayers who have spent decades putting money into public coffers without getting anything back. The recurring complaint is not just about the subsidy, but about the feeling that the State rewards those who already have children with funds from those who chose not to have them or couldn't.

And here the other fault line appears: who really benefits from the payment? One camp argues that families with more children and fewer resources, including many of migrant origin, will be the main recipients; the other replies that, at the school gate and the playground, the parents fit the pogre profile more than the traditional one. The debate heats up because nobody brings statistics, only anecdotes.

The Basque experiment that already failed

The Basque Country has had a similar payment for more than four years, up to a child's eighth birthday, and has failed to lift the birth rate. It's the empirical argument cited most often: if money were the key variable, the Basque Country would be crawling with babies. It isn't. The sceptics' conclusion is that the problem isn't economic, but one of attitude, life plans, antiestéticar of the future or, quite simply, lack of desire.

Housing and wages, the elephants in the room

Even if the payment helps, the decision to have children runs into two walls: housing prices and job insecurity. Homes remain extortionately expensive, wages don't stretch to long mortgages, and stability is conspicuously absent. As one analysis puts it: having money to spend on frivolities is easy, but keeping up a mortgage for twenty years takes more than a monthly payment. Unless the labour and housing markets move, the measure will have a cosmetic effect.

The maths, moreover, doesn't work for those already well into their working lives: a worker with thirty years of contributions estimates having paid around €600,000 between income tax, VAT and social security, and having received five days of sick leave. With that balance sheet, any payment sounds like loose change.

In the end, the Government announces the €200 payment as the great solution. Spain's birth rate isn't picking up even with money on the table. Perhaps, as the more ironic observers suggest, the only thing that will increase is the number of bank accounts receiving subsidies — which is not the same as the number of cots.