Now-or-Never Incentives: How Hungary's Baby-Expecting Loan and Family Housing Allowance (CSOK) Shaped Borrowing and Fertility

The study examines the effects of Hungary's family policy credit programmes-particularly the Baby-expecting loan and the family housing allowance (CSOK) scheme-from a behavioral economics perspective. While these programmes were designed to promote childbearing and improve access to housing, birth trends suggest that their impact has been temporary rather than lasting. The analysis draws on time series from 2010 to 2024, statistics from the Hungarian Central Statistical Office (KSH) and the National Bank of Hungary (MNB), as well as survey evidence. The research focuses specifically on decision-making biases: present bias, "now-or-never" framing, and over-optimism. Our findings indicate that although the programmes did contribute to a short-term increase in births, they primarily generated brought-forward births rather than a durable demographic turnaround. In addition, the side effects of the subsidies distorted the housing market: they contributed to rapid house-price growth, reinforced social inequalities, and further widened regional disparities. The research is novel in that it assesses the effects of family policy loans not only within an economic framework but also through a behavioral lens. It shows that well-targeted subsidies, on their own, are insufficient to achieve sustainable demographic growth if they overlook households' psychological decision-making biases and the long-term social consequences.