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Family Policy in Germany: Lots of Spending but Little Success?

Martin Werding, Reiner Klingholz, Jürgen Liminski, Hans-Peter Klös, Joachim Pfeiffer
ifo Institut, München, 2012

ifo Schnelldienst, 2012, 65, Nr. 15, 3-21

Germany spends more money than other industrialised countries on family policy. Despite this high expenditure, the measures taken to date do not seem to have been very successful by international comparison. Although benefits for families have increased steadily in recent years, the birth rate in Germany has fallen. Martin Werding, University of Bochum, notes that the results of a comprehensive evaluation of family-related benefits will not be fully available until 2013. The effectiveness and efficiency of individual instruments, as well as the need to restructure the current bundle of family policy measures, can only be assessed once all of these results have been analysed. Until that point he urges policy-makers to avoid premature discussions and debates. Reiner Klingholz, the Berlin Institute for Population and Development, suggests distributing the funds available for family-related measures across just four pillars: child benefits, tax breaks for families, parental leave allowance and – alongside crèches and nursery schools – preschools and all-day schools. According to Jürgen Liminski, Deutschlandfunk and Institute of Demography, General Welfare and Family, family policy should contribute to greater justice with secondary assistance –“time or money or both” - and give families a better future in this way. For Hans-Peter Klös, Cologne Institute for Economic Research, the success of family policy should not be measured by the number of births as there are other family policy targets in addition to increasing the birth rate. In his view, more research should be done into the effects of family policy than in the past, which should include the importance of non-budget related family policy measures. Joachim Pfeiffer, CDU/CSU parliamentary faction, highlights that “more money” does not mean more family policy. Greater family-friendliness requires a modern time-management policy for families and greater flexibility for parents in their time management.

JEL Classification: J110, J120

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ifo Institut, München, 2012