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Between 1980 and 2019, the world’s most developed countries roughly tripled their real-terms per capita spending on child benefits, subsidised childcare, parental leave and other family-friendly policies. They also saw their birth rates decline from 1.85 to 1.53 per woman.
In egalitarian Finland, home to some of the most family-friendly policies in the world, the fertility rate has fallen by a third since 2010. In Hungary, famous for its extravagant payouts aimed at boosting the nation’s number of babies, fewer children were born last year than at any time since records began. Meanwhile, in Korea, the poster child of plummeting fertility, the government’s “baby bonus” programme was found to have mainly paid out to women who were already planning on having children.
Analysed across all rich countries, birth rates are no higher among those where childcare is fully subsidised than those where parents pay eye-watering fees — the link between births and total spending on family-friendly policies is negligible. This often prompts head-scratching, but it should not. Unsurprisingly perhaps, the decision on whether to have children, and how many if so, turns out to be about far more than money.
To be clear, family-friendly policies can have other positive impacts on individuals and on society. They make it easier for those who have already chosen to have children to juggle family and work. They alleviate child poverty. But when it comes to the heavy lifting on birth rates, culture is far more powerful than policy, often exerting its influence several steps before the point at which childcare costs might become a serious consideration.
There are a number of distinct but related factors at play. First is the rapid rise of so-called helicopter parenting. In their 2019 book, Love, Money, and Parenting: How Economics Explains the Way We Raise Our Kids, Matthias Doepke and Fabrizio Zilibotti theorise that the realisation a comfortable life has become impossible to attain without a top-quality education has sparked intense status competition between parents. They feel compelled to invest huge amounts of time and effort into optimising their kids’ upbringing. This may have become a deterrent.
In 1965, mothers of young children in developed countries spent an average of just over an hour a day doing activities with their kids. By 2018 that had risen to three hours, and in Korea approaching four. Korea’s fertility rate has plummeted to 0.72, while in France, where parenting is much less hands-on, birth rates have held up well and now stand at 1.8.
The second big factor is shifting priorities for young adults. In 1993, 61 per cent of Americans said having children was important for a fulfilling life, but Pew Research now puts the figure at 26 per cent. A study last year by Lyman Stone, a demographic economist and senior fellow at the Canadian think-tank Cardus, shows that the competing priorities that most erode birth rates among young women are the desires to grow as a person and to focus on their career. Worries over the demands of helicopter parenting also rank high — childcare costs come in at a lowly 14th place.
But just as significant as any individual concern is the sheer amount of anxiety among young adults today. Two pieces of further research from Stone show that the more worried a prospective young mother is, the fewer children she intends to have. Combined with the fact that under-30s in western Europe, east Asia and the Anglosphere are more anxious and stressed than their elders, this may well push birth rates even lower.
Finally, and arguably most importantly, the share of young adults in the west living as a couple is in decline. As social scientist Alice Evans writes, with women increasingly able to support themselves financially, one traditional reason for partnering up has been eroded. This helps explain why the most recent part of the downward trend in births has been driven not by people deciding to have two children instead of three, but by a rise in the share deciding not to have any at all.
Birth rates in liberal, developed countries look exceptionally unlikely to return to replacement level any time soon. If they miraculously do so, it will most likely be due to broad social and cultural shifts, not policy. There’s nothing wrong with governments pursuing family-friendly packages for other reasons but if they’re fretting about ageing and shrinking populations, then they need to find other solutions.
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