Birth rates in the world’s rich economies have more than halved since 1960 to hit a record low, according to a study that urged countries to prepare for a “lower fertility future”.
The average number of children per woman across the 38 most industrialised countries has fallen from 3.3 in 1960 to 1.5 in 2022, according to a study by the OECD published on Thursday.
The fertility rate is now well below the “replacement level” of 2.1 children per woman — at which a country’s population is considered to be stable without immigration — in all the group’s member countries except for Israel.
“This decline will change the face of societies, communities and families and potentially have large effects on economic growth and prosperity,” warned the Paris-based organisation.
Faltering population growth acts as a drag on economic expansion. Across the EU, the rise in overall labour force participation will soon not be enough to compensate for its falling working-age population, exacerbating labour shortages, according to the IMF and European Commission’s 2024 ageing report.
Coupled with rising life expectancy, low births also put pressure on public finances as they leave fewer people contributing the tax revenues needed to pay for the rising costs of an ageing population. A lack of pupils is also driving an increase in school closures across Europe, Japan and South Korea.
Willem Adema, co-author of the report and senior economist in the OECD’s social policy division, said countries can support fertility rates by implementing policies that promote gender equality and a more equitable sharing of work and parenting activities.
The study found a positive association between female employment rates and higher fertility rates, but found that the cost of housing was an increasing barrier to having children.
But even family-friendly policies are unlikely to raise birth rates to replacement levels, said Adema.
A “low fertility future” would require a focus on immigration policies, he added, as well as “measures which can help people to stay healthy and work longer, and productivity improvements more generally”.
France and Ireland have the highest fertility rates in Europe, with anglophone and Nordic countries typically being at the top end of the scale.
Hungary has raised its fertility rate to the OECD average over the past decade with spending on family benefits accounting for more than 3 per cent of gross domestic product, according to the latest national data.
The lowest fertility rates were recorded in southern Europe and Japan at about 1.2 children per woman, with South Korea having the lowest birth rate at about 0.7.
However, a fall in birth rates in countries with extensive policies to support families, such as Finland, France and Norway, “has been a big surprise”, said Wolfgang Lutz, founding director of the Wittgenstein Centre for Demography and Global Human Capital in Vienna.
The OECD said the “second demographic transition”, a trend that marks the shift in attitudes towards greater individual freedom and alternative life goals and living arrangements, helped to explain the decline in family formation.
Childlessness more than doubled in Italy, Spain and Japan among women born in 1975 compared with women born in 1955. Some 20-24 per cent of women in Austria, Germany, Italy and Spain are childless among those born in 1975, with the figure rising to 28 per cent in Japan.
Mothers across the OECD on average had their first child at nearly 30 in 2020, up from the average age of 26.5 in 2000. The figure rises to over 30 in Italy, Spain and South Korea.
Adema said delays having children increased the risk that childbearing does not occur at all. “There is an increased desire to pursue life objectives which do not necessarily involve children,” he added.
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