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Excerpts from the JRL E-Mail Community :: Founded and Edited by David Johnson
#26 - JRL 2006-117 - JRL Home
Date: Thu, 18 May 2006 )
From: Vlad Ivanenko <ivanenko60@yahoo.com>
Subject: Economics of Putin's demographic initiatives

The new demographic initiatives - publicized by Putin in his speech on May 10 - should be considered as a complement to two national initiatives (real estate and education), of which they are an integral and well-devised part. The main innovation - a one-time 250,000-ruble payment to the mothers who have a second child - is conditional. This amount can be spent on three items: mortgage, education and long-term investment in pension plans.

The conditioning makes perfect economic sense. First, it does not fuel currently high inflation. The payment scheme promotes nascent mortgage market. Finally, it provides means for mothers to get re-integrated into the labor force after a break.

Vlad Ivanenko,
economic consultant, Ottawa.