What are the causes and consequences of low fertility rates in advanced economies? How can we combat them?  

Introduction 

In this article, the aim is to explain and find ways to combat the main causes of low fertility rates in advanced economies: the cost-of-living crisis, the declining rates of child mortality and the empowerment of women, which encompasses both their higher education and the increased labour market participation. There may also be concerns in terms of obesity and the harm that has on fertility rates. The consequences that come from low fertility will also link back to the causes but also the aging population and the aging workforce.   

Causes  

There has been a shift in behaviour in many advanced economies: marriages are postponed, firstborns are born later, infant mortality is decreasing and more women in the labour force due to a high cost of living. In the past, when infant and child mortality has been at its highest, fertility rates have also been at their highest: during a period of high child mortality rates, many will try to overcome these problems by giving birth to more children. The low-income countries, in particular, have a higher infant mortality rate than high-income ones: in 2022, the under-five mortality rate in low-income countries 65 deaths per 1000 live births, which was 13 times the under-five mortality rate in high-income countries. (Emi Suzuki, 2024)   

The second factor to decreasing fertility rates is women’s empowerment: women’s education has risen in both numbers and quality. The theory is: as more women attain a higher education and earn a higher income, the opportunity costs such as money spent going on luxurious holidays or jewellery have outweighed the value of having a child. Hence, many more highly educated women are refusing to have children because of the sacrifice that they would have to take for it to happen. It also happens to be that women with higher or better education often have children with lower mortality rates: this is because of the use of contraceptives and there being a smaller difference in the number of children that they have as opposed to how many children they desire to have. (Roser, 2024) As we can see in Figure 1, proper contraception methods (methods that are not traditional methods) are much more common in Western Europe as well as North America – both of which are developed parts of the world and are advanced economies.  

Figure 1   

Another cause for lower fertility rates in advanced economies is the cost-of-living crisis that exists not just in advanced economies. Rising costs have led to the increase in the number of women joining the labour workforce and as discussed earlier, the women that are in the labour workforce have much higher opportunity costs than women that are not. Furthermore, the costs of raising a child in advanced economies is much higher than it used to be – the number of childcare staff and places in the UK for example has reached over 1 million in a 2023 survey by the UK government. The costs of these places have all risen over the past decade and is one of the main causes for the low fertility rates in advanced economies. When thinking about childcare, opportunity cost for both parents can be taken into account as well: instead of using the money to pay for childcare, the parents could use their money elsewhere. Holidays, food and various other non-essential goods are just a few examples of goods they could spend on as an alternative. Thus, even though it may be the right time and the highest chance of fertility at a certain age, young adults may not be willing to sacrifice their careers for a child.   

Consequences  

There are many consequences to the lower fertility rates within advanced economies and arguably it was one of many factors towards the most recent recession fears. Unemployment rates in the USA were released on July 31^st and had risen from 4.1% last month to 4.3%. Part of the reason for the increased unemployment is due to an aging workforce that exists because of the low fertility rates in the US (around 2 children per woman). (Roser, 2024)   

An effect that takes place due to the education of some women is the domino effect of low fertility. As there are more educated women in advanced economies, there are fewer births and lower fertility rates as women use more contraceptive methods and control the number of children that they have with much more autonomy. However, this in turn, leads to a reduced class size in schools because of the lower fertility rates. The effect of this is that even more women are highly educated and as discussed previously, for whom the opportunity cost of having a child is much costly.   

Ways to combat the problem  

Declining infant mortality is one of the causes that should not be combatted given the sustainable development goals of the UN. However, the rising costs of living can be combatted in many advanced economies. More paid parental leave could be a way to combat the crisis; countries such as Sweden and Norway have some of the most generous parental leave policies worldwide. The United States could adopt some these policies and implement more widespread paid parental leave, both for mothers and fathers; promoting gender equality in childcare as well. Flexible working hours are both beneficial for the productivity of people in the workforce, but also for those with children. Germany has introduced policies that promote part-time work for parents, which allows them to stay at home with their children and care for them.   

The aging population is a big problem for countries like the United States. Pension systems and other policies would help take the burden off of the older population. They can also be put in place to avoid individuals taking care of their elderly instead of having children. Pension reforms would help renovate and incentivise the younger population to feel less pressure in having a child. 

Conclusion   

Ultimately, addressing low fertility rates in advanced economies is crucial to mitigating the pressures of an aging population and ensuring long-term economic stability. Policies should focus on making it easier for individuals to balance work and family life, such as improved parental leave, affordable childcare, and pension reforms that reduce financial strain on younger generations. Encouraging a supportive environment for family growth can help reverse declining fertility trends while also promoting gender equality in education and the workforce. By implementing well-designed policies, governments can create conditions where having children is a viable and attractive option without compromising career aspirations or financial security.