The Japan Institute for Labour Policy and Training (JILPT) analyzes the declining real value of Germany's parental allowance system and its challenges as a countermeasure against declining birthrates, based on a report from the German Institute for Employment Research (IAB).
Key Points
1. 27% Decline in Real Value of Parental Allowance
- Since the system's introduction in 2007, the monthly payment caps (€1,800) and minimums (€300) have never been adjusted
- Due to inflation, real value has declined by 27% as of 2023 (using 2007 as base 100)
- The decline in value is particularly pronounced compared to other social security benefits such as child allowances and pensions
- IAB recommends linking to unemployment benefit calculation standards or adjusting for inflation
2. Advancing Declining Birthrate and Growing Importance of the System
- 2023 births totaled 692,989, down 6% from previous year; total fertility rate dropped from 1.46 to 1.35
- Parental allowance positioned as crucial parent support measure alongside childcare facility expansion and child allowance increases
- Recipients of maximum payments increased from 5% at system introduction to 12% in 2021
- Recipients of minimum payments decreased from 27% to 9%, showing changes in usage patterns by income level
3. Improved Maternal Employment Rates and Male Childcare Participation Through System Expansion
- Father's benefit take-up rate dramatically improved from 3% before system introduction to 21.2% in 2008
- Employment rate of mothers with children aged 1-2 increased from 35% in 2006 to 46% in 2023
- For ages 2-3, increased from 42% to 63%; average weekly working hours for mothers with children under 18 expanded from 25 to 28 hours
- Partner month system enables maximum 14-month benefit period, promoting male childcare participation
4. Support for Flexible Working Styles Through Parental Allowance Plus
- Parental Allowance Plus introduced in 2015 enables receiving benefits while working part-time
- User numbers increasing annually, reaching 42.3% of mothers and 20.6% of fathers in 2024
- Partnership bonus system provides additional benefits for couples working 24-32 hours per week
- Benefit period extendable up to 28 months, supporting parents who wish to return to work early
5. Effective Reductions Due to Fiscal Constraints and Policy Shifts
- Since April 2024, income ceiling for eligibility reduced from €300,000 to €200,000 for married couples
- Further reduction to €175,000 from April 2025, restricting high-income households from receiving benefits
- Simultaneous benefit period shortened from maximum 2 months to 1 month (exceptions for premature births, multiple births, disabled children)
- Fiscal reconstruction and benefit optimization cited as reasons for effective reductions raising concerns about future impacts
The article concludes that while parental allowance has had positive effects on promoting maternal employment and father's childcare participation, attention must be paid to the impact of recent real value declines and income restriction tightening on future declining birthrate countermeasure effectiveness.