TREND WATCH
After decades of limiting population growth, the Chinese government is now urging young families to have more babies. Nearly three years after lifting its one-child policy, the nation's fertility rate remains stubbornly low, leaving officials scrambling for ideas to spur a baby boom. This move has become increasingly common around the world over the past decade, with industrialized nations across Asia, Oceania, and Europe rolling out a wide range of incentives intended to boost births. Some countries that have done so, including Russia, Japan, and Germany, have seen their rates climb in recent years, but others haven’t been so lucky.
A half-century ago, a mere eight countries reported total fertility rates (TFRs) below the replacement rate of 2.1 births per woman. As of 2015, a record 98 countries are below the replacement rate. Low fertility is an issue that many of them, including most of Europe, Japan, and Canada, have been facing for decades. Today, the world’s lowest fertility rates are scattered across Europe and East Asia, in countries such as South Korea, Singapore, Greece, Spain, and Italy. America’s fertility rate remains among the highest in the developed world, but it could be said to be underperforming—because, unlike most other countries, America has shown no sign of a post-GFC revival. The U.S. total fertility rate has declined steadily since 2007, dropping to a multi-decade low of 1.76 last year.
The longstanding decline in fertility worldwide has been pushed by powerful economic, social, and cultural forces. In its early stages, the decisive drivers were industrialization, urbanization, and rising affluence. The expansion of universal social insurance programs in the post-World War II decades also weakened one of the oldest incentives for having children: support in old age.
More recently, adverse economic conditions have left many young adults believing they’re unable to afford children. In a recent Morning Consult survey for The New York Times, some of the top reasons 20- to 45-year-old Americans gave for not wanting children or having fewer children than they considered ideal were the cost of child care, worries about the economy, and financial insecurity. Couples in China cite sky-high schooling costs, while Italians lament high unemployment and few feasible child care options. In many developed economies, the stagnation of median-family living standards has been compounded by a widening income and asset gap between younger (childbearing age) and older (retired) adults.
Meanwhile, the dramatic transformation in the social role of women and the structure of the family has accelerated the decline. The increase in female educational attainment, the massive entry of women into the labor force, and the rising average age of marriage and childbirth have all played a role in depressing fertility over the past few decades. So too has the widespread diffusion of effective contraception and the legalization of abortion. Declining testosterone levels among men (see: “You’re Not the Man Your Father Was”) could factor in as well.
What are countries doing about it? Many governments have taken a neoliberal approach by offering direct financial incentives to families with children, such as tax breaks, housing assistance, or discounts on public services. South Korea, Singapore, France, Australia, Canada, Russia, and Poland have all offered “baby bonuses” per child. Other market-oriented pronatalist policies mitigate work-family conflicts in the form of assistance with child care or generous family leave policies. The Czech Republic offers up to 70 percent of one’s salary during maternity leave. Berlin recently announced that all of its child care centers will be free.
Another approach is to revalorize children and the family. Some programs help individuals find partners or try to keep existing families together. Japan offers funding for local governments that sponsor speed dating or other matchmaking events. In China, several provinces now require couples considering divorce to reminisce about their relationship first, in hopes they can work it out and have children. An enthusiastic variant of this approach is to equate children with patriotism. Ad campaigns in Denmark and Singapore encourage young couples to “do it for their country.” Perhaps the most extreme example is Russia, which declared 2008 “The Year of the Family” and has since dedicated several national holidays to canoodling. Families with seven children or more can receive a special prize, the Order of Parental Glory.
The results of these policy campaigns have been mixed. Since 2008, fertility rates have risen significantly in Germany, the Czech Republic, Hungary, and (especially) Russia. They’ve seen marginal gains in Japan and China. But in other countries with a pronatalist bent, including France, Italy, and Greece, gains before 2008 are being wiped out by losses since 2008. And Poland and South Korea are still struggling to break a twenty-year downward trend.
For American policymakers, fertility is a sort of good news-bad news story. The good news is that the U.S. total fertility rate remains near the highest in the developed world. The bad news is that the good news may be fading fast. The level of fertility is positive, but its rate of change is negative.
A decade ago, America’s fertility rate was third in the developed world, behind only Turkey and Israel. But since the Crash of 2008, no developed country has experienced such a steady fertility decline—so that now we’re tied for eighth place. Russia’s TFR, incredibly, has nearly caught up with America’s. Many of America’s traditional fertility drivers are eroding. The complete absence of public support for family benefits (especially in health care) is emerging as a fertility deterrent. The flatlining of real living standards for households under age 35 is also beginning to erode the traditional optimism and risk proneness of American youth. Millennials are starting to show extreme caution in their long-term choices—for example, with regard to marriage and credit. U.S. fertility rates under age 25, while still above those in most other developed countries, are falling much faster.
This change of direction, some suggest, deserves to put pronatalism much higher on America’s list of policy priorities. And over the last year, there have been some signs of rising interest. Still, fertility remains a very back-burner issue in American politics—certainly by comparison to the attention it is getting in other countries. Unfortunately for those waiting for action, the effects of low fertility take decades to manifest themselves. It will take a generation before a decline in the birthrate makes any difference in employment. It will take two generations before it significantly cuts the growth trend in real GDP and tax revenues. While personally people are affected right away by the choice to have fewer children, collectively the impact may not be felt until our children’s or even grandchildren’s lifetimes.
So, as the fertility rate continues to tick downward, American lawmakers will probably take their time in confronting the big question so many other developed nations are already struggling with: Why are young people having fewer children, and what do we want to do about it?
TAKEAWAYS
Fertility rates are falling worldwide, and national leaders are experimenting with pronatalist policies designed to reverse the trend. In the United States, where birthrates are relatively high yet falling, fertility has yet to make its way into the policy discourse.
- The long-term consequences of declining fertility could be severe. As fertility rates around the world have fallen, public concern has shifted from overpopulation to underpopulation. Economists and demographers warn of sweeping consequences: Low-fertility countries face a shortage of young-adult manpower, posing challenges both for their economies and their security forces. Elderly populations will lack financial and familial support. Entrepreneurship and innovation may decline. Ultimately, the working-age population of many nations could well fall faster than productivity rises, resulting in chronic real GDP shrinkage even in the absence of recession—something unheard of in the annals of 20th-century macroeconomic theory.
- Fertility also has the potential to change the religious gradient worldwide. Mounting evidence suggests that the fertility differential between religions may change the religious composition of societies over many decades through sheer generational replacement. And that replacement could itself raise fertility rates. A recent forecast shows that, by 2060, differential fertility alone will cause both Muslims and Christians to grow significantly as a share of the population in nearly all regions of the world and will cause the “unaffiliated” to shrink. (Interestingly, a large 4-to-1 majority of Americans believe the opposite: namely, that people with no religion will rise over the long run as a share of the world’s total.)
- Economy and culture may be key to the success of pronatalist policies. The countries where pronatalist campaigns have worked tend to be doing better economically—and perhaps even more importantly, citizens of these countries are more likely to have positive expectations for the future and fewer expectations that a baby would hurt their personal lives or career. The best way a country can encourage births is to set up a society in which marriage and family is well-aligned with other goals shared by most adults—such as adequate income, a rewarding career, and social respect. Research suggests that policies that facilitate work-family balance see the best results over time.
