Law in Action. How Regulations Impact Demographics
A Global Challenge Demography determines destiny, as the French philosopher Auguste Comte once said. Indeed, demography has the power to shape the future, and in the 21st century, it has become a top priority. It dominates the discourse not only in the “old world” but also in the societies of Asia and Africa. Moreover, the prophecy or assumption presented in the book “Empty Planet: The Shock of Global Population Decline” by Darrell Bricker and John Ibbitson seems to be winning over Thomas Robert Malthus’s thesis about impending overpopulation. Therefore, crafting new state policies through the lens of demography becomes a necessity. Today, there are hardly any countries in the world, perhaps except the USA, that do not have to deal with demographic issues. Europe, or the Global North, due to its low fertility rate, must pursue a complex immigration policy. Meanwhile, Global South countries are unevenly struggling against time to enrich themselves before aging sets in.
Against this backdrop, it is worth examining how Polish pro-family and pronatalist policies are constructed. The focus will be on the influence of legal regulations on social behaviors. It is important to emphasize that the impact of regulations is entirely eclectic, inconsistent across different areas, yet it significantly affects the life decisions of Poles. Let’s take a closer look at several examples of how inconsistent state policies can be detrimental to demographics.
Money Can’t Buy Children The Act of February 11, 2016, on state aid in raising children introduced provisions aimed at boosting fertility in the country. After seven years of the legal regulation’s existence, we know that any growth, if it occurred at all, was temporary. Today, even increasing the benefit from 500 to 800 Polish zlotys is no longer presented as further encouragement for procreation but as an adjustment. The direct transfer proved to be an insufficient stimulus. The main effect of the 500+ policy was to introduce into the political discourse the issue of the cultural weight of factors influencing decisions about having children, especially second and subsequent ones. People cannot be incentivized to have children solely with money; the appreciation and depreciation of relative effects, i.e., the subjective perception of one’s life situation in relation to others in their environment, matter.
Lack of Coherent Legislative Policy.
As one of many normative systems, law can shape certain social attitudes, supporting some and restricting others. However, it seems that laws directed at people of working age do not form a coherent system aimed at achieving a specific goal. They appear as a collection of random legislative “insertions” without a coordinated approach. The lack of coordination within the Polish legal system may stem from the phenomenon of the so-called “Polish ministerialism,” meaning the lack of coordination of policies conducted within individual ministries. On the other hand, the reason may be quite prosaic – Polish legal and political culture does not envision building coherent and comprehensive programs but rather addressing actions temporarily for selected groups. There is a lack of reflection on how these individual legislative changes and new legal institutions affect society as a whole.
Young People without Income Tax.
What Comes Next? An example of such an “insertion” is the institution of income tax exemption for individuals up to the age of 26. Young people were supposed to be encouraged to take up work to replenish the hungry labor market. Simultaneously, there was no reflection on the long-term consequences of this action in other areas of social life. Statistically, in Poland, women decide to have their first child at the age of 29, which is an increase by 6 years compared to the transformation period. The decision to have children is, therefore, postponed over the years. However, how can legal provisions influence such decisions? A young person who could decide to have children upon turning 26 loses 12% of their income. When it comes to individuals using full contribution and tax optimization, i.e., students or those holding student ID cards but not necessarily actively studying, until the age of 26, earning on a mandate contract results in a loss of at least 20%. Young people, at the moment when they could decide to have children, lose a significant portion of their earnings, making them significantly more expensive employees for potential employers. A young person losing their income experiences relative deprivation, perceiving their material situation as decidedly worse than it was not long ago. This does not favor the decision to procreate. Perhaps it is worth considering an amendment that would allow young parents to continue benefiting from tax privileges for each subsequent child.
Lack of Employment Stability.
The combined impact of exemption from contributions and exemption from income tax may also have another negative effect on procreative decisions. Financial pressure leads to delaying the decision to stabilize employment. Young people find it uneconomical to seek employment on an employment contract since they can easily optimize their income by avoiding contributions. Meanwhile, job stability is one of the key factors influencing the decision to have children. A simple analysis of the law in action indicates that the Polish legal system directly discourages seeking stable employment. Furthermore, when considering the situation in the rental and real estate market, the choice between higher income and seeking employment stability seems even more obvious.
Lack of Shelter In line with global trends.
Polish law has contributed to residential properties becoming an optimal investment maintaining the value of invested capital and yielding benefits, i.e., rent. The prolonged trend means that many properties bought with cash are acquired not by individuals but legal entities. Developers find it unprofitable to release many properties onto the market because they can amortize them and, without losing a penny, “drip” small amounts of this necessary good for family life, namely one’s own home. Regulations like the mentioned 2% mortgage stimulate only the demand side, further driving up prices. There are no incentives for a faster introduction of properties to the market, such as a tax on vacant properties, no restrictions on legal entities owning residential properties, and no facilitations on the supply side, such as deregulation, freeing up land, and no support for Real Estate Investment Trusts (REITs), which would invest in commercial, not residential, real estate.
Labor Law and Parental Rights.
The review of internally contradictory legal provisions from the perspective of the country’s demographic policy can be continued by adding issues related to the late implementation of the work-life balance directive, the lack of consideration of employers’ practices towards pregnant employees, and vice versa. In this last area, it is worth emphasizing that, as reported by Dziennik Gazeta Prawna, over 90% of pregnant women take sick leave. This situation is problematic because sick leave can only be temporary, and both the employer and the pregnant employee experience stress or discomfort. The employer is not certain, although they may suspect, whether the employee will return to work before giving birth, and the woman may feel reluctance, understandable given the uncertainty, on the employer’s side. However, the experiences during pregnancy have a significant impact on the decision to have another child. Thus, no one benefits from the current solutions, and the legislator consistently ignores such simple analyses of the law in action.
Perhaps it is worth not fighting against the practices of employers and female employees and introducing maternity leave paid by the Social Insurance Institution (ZUS). ZUS already covers the costs of sick leave for pregnant women at 100%, so, in fact, we have a specific informal maternity leave for 90% of women. On the one hand, this would relieve employers and increase their certainty about shaping the functioning of the workplace. On the other hand, it would also relieve women psychologically, who, in the vast majority, do not work during pregnancy. Perhaps it is worth considering incentives to decide on a second child by introducing support for women who, due to having a fixed-term employment contract, lost it. The analysis of the law in action indicates that women opt for de facto fictitious employment only to regain benefits in such situations. This is then paid by ZUS, only after a series of legally unwanted actions ignoring social life practices. It leads to unnecessary antagonism between young mothers and employers, discouraging them from hiring potential young mothers who are just looking for opportunities to receive benefits. This also discourages having more than one child, as the psychological and social costs become relatively high.
Call for Coherence in the Legal System.
A coherent legal system, benefits, and norms addressed to people of working age, employers, and young parents as a whole can influence the perception of parenthood. Meanwhile, demography determines destiny. Poland is fighting its destiny by maintaining regulations that discourage having children early, driving up real estate prices, and preventing the early establishment of one’s own family nest. These regulations antagonize employers and pregnant employees and young mothers, encouraging an instrumental treatment of the law, which is unfriendly to parents. A review of regulations in the spirit of the law in action and the introduction of a coherent system of regulations addressed to potential parents and parents is essential in the current situation.
Moreover, the review is just the beginning of a reform in the spirit of a consistent demographic policy. In the future, incentives should be introduced to promote parenthood and make daily life easier for parents with young children in such mundane activities as visits to offices or shopping, but that is a matter beyond the scope of the current analysis of Polish law in action.
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