But Shouldn’t the Policy Actually Work?

By Noah Rothman

Wednesday, September 09, 2026

 

I’m reminded of George W. Bush’s “compassionate conservatism” or his father’s promise to lead a “kinder, gentler nation” after Reagan whenever I hear the nationalist right advertise their noble intentions above and beyond what their policies are going to achieve. To me, that sounds more like an expression of the insecurities drilled into them by the dominant center-left culture in elite circles than a declaration of intent.

 

I’m not alone there.

 

My colleague John Puri recently excoriated the elements within the administration that floated a taxpayer-funded childcare subsidy designed to compensate stay-at-home parents. I share Puri’s philosophical objection to the notion that Washington possesses some special expertise such that it should “nudge” me in any particular direction. That outlook doesn’t change with the party in power. But we can set that aside for now.

 

Likewise, we can also put a pin in the virtue of redistribution generally, and whether engineering a transfer of wealth to married couples, which are typically more economically stable than other family configurations, is a valuable enterprise. The real question is whether this policy will perform as its advocates advertise. Puri argues that this large-scale misallocation of capital will have a “very small” but still positive impact on the lives of a precious few. I’d argue that, even if he’s right, the net negative effect of this policy would swamp any observable benefits.

 

First, we have to dispense with the notion that this is anything other than bank-shot natalism. What is the taxpayer-backed subsidy supposed to do but offset the income derived from work (about $9,000 per year per child) other than to incentivize child-rearing and, therefore, childbirth? The program, as envisioned, would repurpose an existing welfare program for low-income parents. Critics claim that the intent of that program was to funnel women into the workforce, so what’s the harm in answering the ills of social engineering with more social engineering?

 

That’s an interesting perspective, but it’s entirely separate from what should be the biggest question before us: Will it work?

 

Giving people money so they’ll have more children isn’t a new idea. Indeed, for over a decade, those who favor top-down social engineering to boost population rates have pointed to Viktor Orbán’s Hungary as a model. Well, the results of that experiment are in, and they’re not impressive.

 

From 2010 to 2025, the Orbán government implemented a whole suite of policies designed to encourage births, including paying people to have or even just promise to have kids. As is often the case (think “Cash for Clunkers”), the effect was front-loaded. Between 2010 and 2020, Hungary’s birth rates did increase from 1.25 children per woman to 1.59. But by 2025, the birth rate had fallen back to 1.31 — right about where it started. Combined with rising emigration and the government’s crackdown on legal immigration, Hungary’s population fell by about half a million over Orbán’s 15-year tenure.

 

That shouldn’t have come as a shock. As in almost every developed nation, fertility rates are lowest in cities, where young people face a variety of competing pressures that complicate family formation, finances being just one of them. The cash the government threw at young people did little to ease those other pressures, and the inflationary effect of the government’s big-spending and anti-market policies neutralized the purchasing power that recipients were supposed to enjoy.

 

Conservatives should have anticipated this effect. The subsidy they envision is not all that distinct from a “basic income” provision, which Democrats have toyed with for so long that it’s reasonable to expect self-identifying conservatives to have familiarized themselves with the literature by now.

 

From 2017 to 2018, Finland ran a basic-income pilot program, randomly selecting 2,000 working-age Finns to receive a monthly supplementary stipend with no reporting requirements. “This was a big carrot, and we can see it didn’t fully work,” one economist recalled. While the program’s administrators found that beneficiaries experienced more happiness and less stress, they did not engage in the behaviors that Helsinki tried to “nudge” them into — namely, finding full-time work.

 

“The Finnish experiment failed to produce any sizable short-term employment effects despite offering larger improvements in employment incentives than any realistic nationwide policy could provide,” one study concluded. Because expanding the program to the whole country would have required a 30 percent across-the-board income tax hike, the pilot program was quickly scrapped.

 

The Canadian province of Ontario tried something similar from 2016 to 2019, and it failed in a similar way. Canadian lawmakers said the program was “a disincentive to get people back on track,” and the cash did not help its recipients become “independent contributors to the economy.”

 

Perhaps the most interesting experiment in taxpayer-provided income supplements from the natalist perspective took place in New Jersey in 1968. There, the Johnson administration experimented in select communities with a “negative income tax” (NIT), which amounted to a minimum basic income that phased out based on individual earnings. That failed, too, and for all the usual reasons. But beyond creating disincentives to work, it also had a negative impact on family cohesion.

 

The economist Jodie Allen summarized the results of the Stanford Research Institute’s exploration of the NIT’s impact. The institute’s research found that “the income guarantee to some families reduced the pressure on the breadwinner to remain with the family, while the benefit-reduction rate also reduced the value to the family of keeping a wage earner in the unit.” Rather than promoting family formation and stability, she observed, “the NITs seemed to increase family breakup.”

 

Shouldn’t those on the right who appear to believe that big government can be an ally in their war against declining fertility rates grapple with the perverse incentives that accompany any program that begins and ends with just giving people money? Isn’t the program supposed to perform as we were led to believe it would? And if it doesn’t, should we comfort ourselves with the notion that at least the right’s statist reformers are well-intentioned?

 

Despite these failures, “Optimists argue that more thoughtful pro-natal policies are more successful at increasing the fertility rate,” the American Enterprise Institute’s Vanessa Brown Calder wrote. She’s skeptical of the claims of the “optimists,” but Brown Calder is right to expect that the evidence against them will not dissuade proponents of top-down social engineering. For some, bigger government is both a means to an end and an end in and of itself.

 

And maybe none of these experiments were designed properly. Maybe it would work if the right people administered it. Maybe true natalism has never been tried.