Childbirth incentives risk reducing women's work, Italy's INPS says

Economic incentives aimed at boosting birth rates, such as Italy's universal child allowance, may have a limited effect on increasing births and could inadvertently decrease women's participation in the labor market, according to a report by the Italian National Institute for Social Security (INPS).

The INPS report highlights that measures like the nursery bonus and remote work are significantly more effective in supporting female employment. Access to the nursery bonus, for instance, has been shown to increase a mother's probability of being employed by about 6 percentage points. Remote work proves to be a powerful tool, capable of reducing the "child penalty", career setbacks due to having children, by up to 87% and boosting salaries by as much as 1,300 euros annually after childbirth. The report also notes positive effects of remote work on fertility rates.

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The issue of birth rates cannot be addressed solely with monetary transfers. The decision to have a child also depends on job stability, the ability to balance life and professional demands, the availability of childcare services, and the distribution of caregiving responsibilities between mothers and fathers.

Gabriele Fava, president of INPS, stated that the decision to have a child is influenced by more than just financial aid. "The issue of birth rates cannot be addressed solely with monetary transfers," Fava explained. "The decision to have a child also depends on job stability, the ability to balance life and professional demands, the availability of childcare services, and the distribution of caregiving responsibilities between mothers and fathers."

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A formally universal measure can produce unequal results if territories do not offer the same access conditions.

Fava pointed out that while the nursery bonus has seen a substantial increase in usage, its benefits are unevenly distributed. Families with lower income (ISEE) often use the bonus less, particularly in areas with weaker service offerings, less stable employment, and uncertain economic returns for female workers. "A formally universal measure can produce unequal results if territories do not offer the same access conditions," he added.

Similarly, agile working, which has become more prevalent since 2020, can help mitigate the economic disadvantages of motherhood and promote a more equitable distribution of family responsibilities. Fava concluded that combating declining birth rates requires a holistic approach. "It requires an ecosystem made of stable work, adequate wages, childcare services, leave, flexibility, gender equality, digital accessibility, territorial proximity, and a culture of sharing. In this logic, INPS can have an essential function. Making family, parenthood, and care support more readable, simpler, closer, more integrated."

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It requires an ecosystem made of stable work, adequate wages, childcare services, leave, flexibility, gender equality, digital accessibility, territorial proximity, and a culture of sharing. In this logic, INPS can have an essential function. Making family, parenthood, and care support more readable, simpler, closer, more integrated.