“Abkindern”: The fascinating family model of the GDR – and why it is suddenly highly relevant again

No children due to high costs? How East Germany radically solved this problem in the 1970s

Paying off loans through children: Is the East German model better than our expensive spousal splitting system?

Germany's population is shrinking. The birth rate is plummeting to historic lows, while the rapidly aging society is inevitably pushing social welfare systems to the brink of financial collapse. Faced with exploding living costs, uncertain future prospects, and a glaring shortage of childcare places, the desire to have children often falls by the wayside for many couples today – or simply becomes unaffordable. But what if a solution to this highly topical problem lies in the past? In East Germany, there was a family policy instrument designed to alleviate the financial worries of young couples and protect the state from an aging population: the marriage loan. Those who married received money from the state without bureaucratic hurdles – and those who had children didn't have to repay the loan. This pragmatic concept was colloquially known as "child-rearing." Embedded within a comprehensive childcare system, it created incentives that appear in a completely new light today. A look back at a forgotten and often ridiculed model that raises the provocative question: What can we learn from East German history for the family policy of tomorrow – and where are the dangerous limits of state-run birth planning?

When a forgotten socialist idea suddenly becomes highly relevant: What the West can learn from the East – and what it cannot

A word steeped in history:
"Abkindern" sounds strange at first glance, almost repulsive – as if one wanted to get rid of children. In fact, the opposite was true. In East Germany, the term referred to the gradual repayment of a state-backed marriage loan through the birth of offspring. Those who married and had children paid off their debt not with money, but with offspring. This half-joking, half-pragmatic phrase from East German vernacular describes a family policy instrument that is captivating in its simplicity and whose effectiveness is still debated today. Now that Germany is struggling with a birth rate of 1.35 children per woman and an annual birth deficit of over 330,000 people, the question arises: Was this forgotten instrument perhaps wiser than we thought?

The marriage loan: Construction of a targeted incentive

From January 1, 1972, newly married couples in East Germany could apply for an interest-free loan of initially 5,000 East German marks, which was increased to 7,000 marks in 1986. The conditions were precisely defined: both partners had to be under 26 years old – the official term was "young marriage" – and their combined income at the time of marriage could not exceed 1,400 marks. This income limit deliberately targeted the lower and middle classes, effectively excluding higher earners.

Repayment was made in monthly installments of 50 marks. Crucially, the repayment schedule at birth was key: 1,000 marks were forgiven for the first child, another 1,500 marks for the second, and the entire remaining amount was paid off for the third. If the loan had already been overpaid by this point due to these extra repayments, the excess was refunded to the couple – effectively turning the loan into a subsidy. Even officially certified stillbirths were accepted for the purpose of repayment – ​​a detail that underscores the human dimension of this policy.

Between 1972 and 1988, a total of 1,371,649 marriage loans were granted, amounting to 9.3 billion East German marks, of which approximately a quarter were fully repaid through child support. This figure alone demonstrates the broad social acceptance of the instrument: almost every second East German marriage that could be concluded under the loan conditions made use of it.

The demographic context of the 1970s

Marriage loans didn't emerge from a vacuum. In the first half of the 1970s, East and West Germany shared a sad commonality: both had some of the lowest birth rates in the world at the time. In 1973, West Germany recorded 10.3 live births per 1,000 inhabitants, while East Germany recorded 10.6. By 1974, the fertility rate in East Germany had fallen to a historically low 1.54 children per woman – a consequence of the so-called "pill gap," the widespread use of hormonal contraceptives combined with changing moral values.

The SED leadership reacted to this setback with the 8th Party Congress in 1971, at which the "unity of economic and social policy" was proclaimed. Family policy was declared a matter of state policy. According to the Family Code, the family was considered the "smallest cell of society" and, according to Article 18 of the GDR Constitution, was under the "special protection of the socialist state." The marriage loan was one of many instruments in a comprehensive pronatalist program, which also included the so-called "baby year"—a paid year of maternity leave with full wage replacement—as well as the right to a childcare place, reduced working hours for mothers from the second child onward, and income-dependent child benefits.

Crucial to this was the comprehensive network of state-run childcare facilities. The GDR pursued an emancipatory family policy that explicitly viewed women as working professionals, not as stay-at-home mothers. External childcare was widely accepted because full-time employment for mothers was the social norm. In 1986, 70 percent of women in the GDR had their first child before the age of 25 – a figure that gave the system a significant demographic boost: generational cycles were shorter, and births occurred more frequently.

What the statistics really show: Success with Asterisk

The demographic results of East Germany's family policy in the 1970s are impressive at first glance. While the birth rate in West Germany continued to decline and stagnated at 9.4 live births per 1,000 inhabitants in 1978, East Germany recovered significantly: in 1978, the figure there was 13.9 – East Germany had improved its position in a European comparison from one of the worst performers to a middle-ranked position. Between 1974 and 1980, the total fertility rate in East Germany rose noticeably, while it continued to fall in West Germany.

However, these figures must be interpreted with methodological care. First, the phenomenon of the timing effect must be considered: many women who would have had children anyway did so earlier due to financial incentives. The average age of mothers in East Germany at their first birth was around 22 – a figure that automatically inflates the total fertility rate without the overall number of children per woman actually increasing. Having the same total number of children earlier makes the total fertility rate appear statistically higher than it reflects the actual reproductive reality.

More fundamental is the finding of a scientific analysis of birth trends and family policy in the GDR: Despite substantial resources and ideological support, the pronatalist population policy had "extremely limited" effectiveness. The magazine "Spektrum der Wissenschaft" also summarized the findings: Despite its extensive family policy, the GDR failed to sustainably exceed the replacement level of 2.1 children per woman, nor did it succeed in replacing religious communities as family stabilizers. The increase in the birth rate in the late 1970s was real, but it proved unsustainable – the underlying societal trends of individualization, the expansion of women's education, and the postponement of starting a family remained influential.

A package, not a single instrument

What is often overlooked in retrospective debates about the East German marriage loan is the systemic nature of the measures. The loan was not effective in isolation – it was embedded in a comprehensive package that systematically dismantled structural barriers for families. Reduced working hours for mothers with their second child, indefinite paid leave for sick children, statutory protection against dismissal for pregnant women and breastfeeding mothers for up to three years, and a nationwide childcare system with nearly 100% coverage for children under three – all of this together created an infrastructure in which parenthood was no longer experienced as an individual risk decision, but as a socially secure norm.

A key difference from West German family policy lay in the structural integration of women into the labor market. In East Germany, female employment was not an exception but a basic requirement – ​​and the infrastructure reflected this premise. In West Germany, by contrast, joint taxation of married couples effectively subsidized the single-earner model well into the 2000s, structurally excluding women from the labor market. ZEW researchers later confirmed that joint taxation of married couples and free co-insurance have no demonstrable effect on the birth rate, but hinder the equal division of labor between partners and increase the financial risks for families.

The post-reunification phenomenon: When incentives disappear

Few demographic events of the 20th century were as abrupt and dramatic as the collapse in birth rates in the eastern German states after 1990. With the monetary, economic, and social union, marriage loans, like all other debts, were converted and gradually settled. Even more drastic, however, was the sudden collapse of the entire social safety net: daycare centers were closed, company-run childcare facilities were dissolved, and employment became precarious. Between 1990 and 1993, the birth rate in the new federal states plummeted to historically unprecedented levels below 1.0 – a demographic shock that even astonished experts.

This decline, viewed through its reverse logic, is highly revealing: it demonstrates that East German family policy was indeed effective – not primarily through financial incentives alone, but through the provision of structural security. When this security disappeared, the willingness to start a family also plummeted. The average age of mothers at first birth rose rapidly after reunification – women adopted West German patterns, postponed births, and invested in education and careers. This was not an irrational decision, but a rational adaptation to changed living conditions without social safety nets.

Rediscovering an idea: From Thuringia to Budapest

The idea of ​​"child relief" hasn't died out politically. In 2007, the CDU-governed state of Thuringia passed a so-called family loan of €5,000 for married and unmarried parents after the birth of a child – with an interest rate about two percent below market level and a "child relief" clause: €1,000 forgiven for the second child, €1,500 for the third. The CDU in Saxony-Anhalt also adopted this model in 2012 under the name "family status loan" – an income-independent, interest-free loan of €5,000, with a one-third forgiven per child.

The Hungarian experiment under Prime Minister Viktor Orbán is far more ambitious. Starting in 2019, Hungary introduced an interest-free baby loan program: a loan of approximately €25,000, with 30 percent of the debt forgiven upon the birth of a second child and full repayment for a third child. This is complemented by the CSOK program for homeownership, tax exemptions for mothers with two or more children, and debt forgiveness for students with three or more children. Hungary now spends around 5 percent of its gross domestic product on family support – the highest figure worldwide.

The results are mixed and politically controversial. While Hungary's fertility rate did rise from 1.23 in 2011 to 1.61 in 2020 – the highest figure since 1995 – it subsequently declined to 1.55 in 2022, then 1.51 in 2023, and finally 1.39 in 2024 – a figure that is historically among the lowest in Hungary. Defenders of the Hungarian model point out that the number of women of childbearing age shrank by almost 23 percent between 2010 and 2024, and that the decline in births was therefore proportionally much smaller than the absolute figures suggest. Critics, however, argue that the subsidies disproportionately benefit high-income families, have artificially inflated property prices, and leave structural inequalities untouched.

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France as a counter-model: What structural long-term thinking can achieve

A comparison with France is instructive. For almost a century, France has pursued a consistent pronatalist policy that is not based on short-term, one-off incentives, but rather on family infrastructure deeply embedded in the constitution. This includes one of the densest public childcare networks in Europe, offering full-day care from the age of two or three, extensive parental leave for both parents with guaranteed return to work, and a sophisticated tax system that directly considers family size in tax assessments.

Until 2014, France's birth rate was nearly 2.0 – close to the replacement level – and then fell to 1.66 in 2023. This is still the second-highest birth rate in the EU. The crucial difference to the German model lies not in the amount of financial transfers, but in structural reliability: parents in France can count on childcare places. They can plan their careers. They experience family policy not as a bureaucratic labyrinth, but as a lived promise of the state.

Germany's demographic imbalance: The situation is serious

The data for Germany are alarming and have recently been revised even more dramatically than expected. In 2024, 677,117 children were born – two percent fewer than in the previous year. The Federal Statistical Office estimates only 640,000 to 660,000 births in 2025, compared to approximately one million deaths. This means the birth deficit has exceeded 300,000 people for the fourth year in a row. For the first time since 2020, net immigration was no longer able to offset this deficit: the population shrank by around 100,000 to 83.5 million in 2025.

The ifo Institute dramatically revised its population forecast downwards at the beginning of 2026: Germany's population is now expected to shrink by around ten percent by 2070 – whereas previously only a one percent decline had been anticipated. This is due to new data from the 2022 census, which revealed that Germany actually has only 81.9 million inhabitants instead of the projected 83.2 million. This correction alters all long-term projections.

By 2035, one in four people in Germany will be 67 years or older – compared to only one in five in 2024. The number of people over 65 will increase from 16.8 million to 23.3 million by 2040, while the number of people of working age will fall from 49.3 million to 42.3 million during the same period. In absolute terms, this means that seven million fewer people of working age will have to support 6.5 million more retirees.

The fiscal consequences are becoming concrete: A Prognos analysis for the New Social Market Economy Initiative projects a demographically driven shortfall of €83 billion in the statutory pension insurance system by 2040. This is compounded by rising expenditures for healthcare and long-term care. The Bertelsmann Foundation has already warned that Germany's public finances are not sustainable in the long term: It anticipates an annual budget deficit of nine percent of gross domestic product by the end of the 2040s.

The implementation gap: Germany wants children, but isn't having any

A frequently overlooked finding is that Germany's demographic problem is not a matter of wishful thinking. If the population were asked about their desired number of children, researcher Katharina Spieß estimates the birth rate to be 2.4 – well above the replacement level. The actual birth rate is 1.35. This gap between the desire for children and the reality of having children is the real political problem.

An Insa survey from February 2026 makes the reasons tangible: 55 percent of Germans agree that having children is no longer affordable in Germany. 81 percent cite high living costs as the main obstacle – rent, food, energy. 58 percent complain about a lack of daycare and childcare places. 40 percent see the loss of income due to parental leave as a decisive factor. These are not subjective preferences, but hard structural barriers.

A comprehensive study by the ZEW (Centre for European Economic Research) confirmed that significantly fewer children would be born in Germany without existing government support. Childcare infrastructure primarily reduces childlessness. Parental and child benefits make it easier to decide to have more children. However, income splitting for married couples and free co-insurance have no measurable effect on the birth rate – these instruments, amounting to tens of billions of euros annually, have no demographic impact but subsidize the single-earner model.

What the GDR marriage loan really teaches us

The real lesson of the East German marriage loan lies less in the instrument itself than in the systemic idea behind it. An interest-free loan repaid through children is elegant in its logic: it reduces debt precisely when costs rise – when starting a family. It creates no incentive that directly conflicts with career advancement in monetary terms. It doesn't reward the decision to have children, but rather compensates for some of the structural disadvantages faced by families in an expensive society.

At the same time, it would be naive to rely solely on the credit model. The East German data clearly shows that financial incentives alone, without accompanying structural measures, only postpone births but do not increase the overall number of children. France and the Nordic countries deserve more attention: there, the compatibility of family and career is not mere rhetoric, but a reality of infrastructure. In Germany, however, the shortage of crèches and daycare centers, especially in the west, remains a structural problem that no amount of family policy rhetoric can overcome.

The skills shortage, exacerbated by demographic changes, is not merely an abstract threat to the future. Already, 23 percent of employees subject to social security contributions are between 55 and 65 years old – they will be retiring from the workforce within the next ten years. The DIHK Skills Report for the end of 2025 states that skills shortages will remain a structural problem despite the economic slowdown. Without a countermeasure – either through rising birth rates or significantly increased immigration of skilled workers – Germany's economic output will decline in the medium term.

The economic calculation of inaction

Sometimes the cheapest way is the most expensive. Every generation not born that could have made productive contributions to pensions, long-term care, and the healthcare system leaves a fiscal gap. This isn't a biological argument, but simple arithmetic of the pay-as-you-go system: the statutory pension insurance only works if the working generation is large enough to support the retiree generation.

The alternative – net migration on a very large scale – is politically and socially demanding. Sufficient numbers of skilled immigrants require attractive living conditions, rapid recognition of qualifications, social integration, and a welcoming culture, which is currently a subject of political debate in Germany. Demographic replacement through immigration alone is hardly feasible: the annual birth deficit of over 340,000 people would have to be entirely offset by skilled net migration, which would simultaneously contribute to the social security system – a scenario that even optimistic migration economists consider unrealistic.

A smart family policy would therefore not be ideology, but fiscal policy. Investing in childcare infrastructure, in parental leave models that enable genuine parity in employment between mothers and fathers, and – yes – possibly also in low-interest or interest-free family loans based on the model of the East German marriage loan, would be an investment in the financial viability of future social systems.

Limitations of the model: What socialism does not transfer

It would be analytically dishonest to describe the successes of the GDR model without pointing out the structural conditions that are not exportable. The GDR did not have a free housing market: a key motivation for starting a family early was that parenthood was often the only way to leave one's parents' home and obtain one's own apartment. This perverse incentive structure—children as a prerequisite for access to housing—is neither replicable nor desirable in a free market economy.

Similarly, childlessness was practically not recognized as a standard alternative in East Germany. Social and financial benefits were preferentially granted to families with children, and societal norms penalized alternative lifestyles. Having children was less a free choice than a social expectation, the non-compliance with which had consequences. A family policy based on coercion or de facto exclusion is incompatible with the rule of law and liberal principles.

The scientific disillusionment is therefore justified: even totalitarian regimes reach their limits when it comes to family matters. Romania under Ceaușescu, which banned abortions, experienced not a demographic miracle, but a humanitarian disaster. East Germany was more lenient, but even there the birth rate ultimately remained below the replacement level. Marriage loans were one instrument among many – effective perhaps in terms of timing, but hardly in terms of the total number of children per woman.

Options for action for Germany: Seven lessons from history

Nevertheless, concrete political lessons can be drawn from the historical findings, lessons that can be discussed beyond ideological barriers. First: Structural childcare infrastructure is more effective than cash transfers. Expanding the availability of nursery and kindergarten places, especially in western Germany, is the most cost-effective measure for reducing involuntary childlessness. Second: Parental leave models that create genuine parity between fathers and mothers have a dual effect – they increase the likelihood of having a second child and reduce the gender pay gap. Third: Low-interest or interest-free family loans, repaid upon birth, lower the barrier to entry for young couples in a high-cost economy. They can be a useful supplementary measure, but they do not replace structural reforms.

Fourth: Joint taxation of married couples in its current form needs to be reformed or at least replaced by effective family policy instruments – not for ideological reasons, but because it is expensive and demonstrably ineffective on the birth rate. Fifth: Housing costs are the most pressing structural problem. 81 percent of Germans cite the cost of living as the biggest barrier; without affordable family-sized housing, all other instruments remain mere drops in the ocean. Sixth: Long-term perspectives and reliability trump short-term incentives. France has demonstrated for decades that a stable family policy system that treats parents as capable of planning for their children generates permanently higher birth rates than discontinuous special programs. Seventh: The social discourse surrounding childlessness must be destigmatized – in both directions. Childless people must not be subjected to social pressure, nor should parents continue to have to navigate the system as structurally disadvantaged.

Forgetting as a political mistake

The irony of German family policy lies in the fact that the very country that conducted a real experiment with pronatalist policies in the GDR systematically ignores the lessons learned. This is not due to ignorance—the data is available, the studies exist—but rather to political and cultural reflexes: the term "preventing children" evokes socialism, and socialism is reflexively viewed negatively in German discourse, regardless of the quality of individual instruments.

A sober economic analysis would be appropriate. The GDR model didn't fail because of marriage loans. It failed because of the lack of freedom, the lack of choice, the compulsory housing arrangements, and the ideological overtones. But its core – state-funded childcare infrastructure that enabled mothers to work, combined with targeted financial start-up assistance for young families – is neither socialist nor fascist, nor in any way ideologically contaminated. It is social policy as any developed democracy knows it.

Germany has a birth rate that is structurally below what people desire. It has a demographic debt to its social welfare systems that is growing daily. And—in the history of its own second statehood—it has an empirical experiment that shows what is possible under which conditions and what is not. It is high time to retrieve this knowledge from the ideological archives and evaluate it objectively. The term "reducing birth rates" may belong to history—but the question behind it is extremely relevant today.