Can Policies Boost Birth Rates?

Birth rates have declined sharply in most OECD countries over the past few decades. The total birth rate was still sufficient to maintain a constant population in the early 1980s but has since declined to just 1.6 children per woman. This is well below the average of 2.1 children per woman needed just to maintain current population levels and will bring dramatic consequences – declining population levels in most OECD countries and a much higher proportion of older people.

The most direct consequence of low birth rates is a “vicious circle” of decreasing population: fewer children today imply fewer women of childbearing age 20 years from now, so the cumulative momentum of current low birth rates will be difficult to reverse.

The effect on society is also significant. There will be fewer young adults to care for elderly family members, pensions and healthcare will take up an increasing amount of public spending, the workforce will be older and less adaptable, and domestic savings may shrink. And changing expectations will only make matters worse. People tend to say that they want to have the same number of children as was typical when, they themselves, were young, so low birth rates become very difficult to reverse.

This Policy Brief looks at the extent of the falling birth rate problem, whether governments can do anything to reverse it, and how they can cope with the economic and social consequences.