Why don’t people have children?

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“Why are we so surprised that our teenagers are having babies?”, blasted the Daily Telegraph in 2009 alongside a photo of Alfie Patten, a 13-year-old schoolboy and recent father. The article insisted that preventing people like Patten and the boy’s then 15-year-old mother from having children required a punitive approach; namely, “delete[ing] all the advantages of teenage mothers”.

While the explicit target was teenagers, the subtext was clear: the state should not “subsidize” people, especially women, to have children. This rationale would go on to shape government policy, with George Osborne announcing cuts to family allowances and child tax credits in 2010. The reason? An “explosion of social charges”.

Shortage of babies in Britain.

In recent months, however, the media seems to have made an extraordinary about-face. “Britain’s baby shortage is everyone’s problem,” said The Times. “Britain’s ‘baby shortage’ could lead to economic decline”, announced The Guardian. “How do you convince people to have babies?”, asked the BBC. A few weeks ago we even saw the Sunday Times all a tax on “children without children”. The objective may have changed since 2010, but the reflex of the stick rather than the carrot remains.

While some of the more outlandish proposals should be scoffed at (the same article also offered a letter from the Queen for every third child), this change was to be expected. Birth rates continue to fall in much of the world. Every country in the EU has a fertility rate (the number of children per woman) below 2.1 – the level required to maintain a stable population without immigration. In the United States this rate is 1.7, in Great Britain it is 1.6. Eastern Europe has lost 6% of its population since the 1990s, while Russia has four million fewer inhabitants. Indeed, the greatest obstacle to the Kremlin’s geopolitical ambitions is not technological, or even political, it is demographic.

It’s worse in Asia. Singapore’s fertility rate is 1.0, South Korea’s is 0.9. Japan’s rate of 1.3 recently leads Elon Musk to reflect how the country will “eventually cease to exist”. According to current trends, 23 nations, including Japan, should see their population halved by 2100.

These trends are not new, of course. As a country becomes wealthier and women have access to contraception – which correlates with higher levels of freedom and education – they have fewer children. Like increasing life expectancy or urbanization, this seems to be an iron law of social development.

But once societies fall below a fertility rate of 2.1, which is now the case for about half the planet, the argument changes. In the absence of immigration, this means a shrinking population, labor shortages and a dwindling pool of workers to support an aging society. While it’s a good thing that birth rates have fallen, there is an interest in keeping fertility rates near 2.1.

It’s the economy, silly.

So why don’t people have more children? Given the long-term and global nature of the question, a global answer is difficult. Wealth is part of the puzzle, of course, but that doesn’t explain why Israel has a higher fertility rate than India (ultra-Orthodox communities, if you’re wondering), or why France has more babies than neighboring Italy or Spain. What is clear, however, is that something has changed dramatically in Britain over the past decade.

At the end of the 20th century, as New Labor oversaw a major expansion of the state and the economy boomed, something strange happened in the UK: the fertility rate rose. When Labor came to power in 1997, the rate was 1.7. The fact that it remained as high as 1.9 until 2012 shows how important government policies – and economic conditions – are in determining whether or not people have children.

Although Tony Blair and Gordon Brown never formulated overtly pro-natalist policies, successive Labor governments introduced free nursery education, child tax credits and Sure Start centres. By the mid-2000s, free part-time preschool education was available to all three- and four-year-olds, while tax credits played a central role in lifting one million children out of poverty. All this prompted people to start a family.

That changed, however, in 2013, when Britain saw the biggest drop in births since the 1970s. At the time, the Office for National Statistics pointed out that benefit cuts and a less stable labor market and well paid were key factors in the decline.

Other factors have also driven down birth rates, including the extraordinary cost of childcare in the UK. The OECD estimates that working parents with an average wage in Britain spend 29% of their income on full-time child care – nearly three times the average for advanced economies. Somewhere else, a TUC survey of working parents with preschoolers recently found that 32% spent more than a third of their salary on childcare.

Then there is the housing market. Those between their mid-thirties and mid-forties are three times more likely to rent than 20 years ago. It matters because owners are more likely to have children than renters. A 2017 study found that house prices play a role in the reason: a 10% rise in house prices led to a 2.8% increase in births among homeowners, but a 4.9% drop among renters, meaning a net drop of 1.3% in England. Rising property prices are not only a source of inequality, they also have an impact on whether and when to start a family.

Then there is the array of dysfunctional policies that punish women for wanting children. Student loans penalize those who take longer to pay off their debts (which women invariably do when they take time off work to have children). Remarkably, the government’s latest reforms, which will be implemented next September, make it even worse.

That’s before I mention the gender pay gap or job discrimination that women face if they want to have children. While statutory provisions for maternity leave in the UK seem progressive, the opposite is true. Although a woman can take a year of maternity leave and be paid for 39 weeks, only the first six weeks are compensated at 90% of her salary. This then drops to £156 per week – an income below the national minimum wage. By contrast, mothers in Croatia are entitled to six months of what the TUC considers “decently paid” maternity leave.

When it comes to childcare, benefits, housing, maternity leave and working life, women in Britain get a terrible deal. This, together with stagnating wages, is the reason the country’s fertility rate has fallen over the past decade. The state shouldn’t interfere in matters of bodily autonomy, but it makes sense to offer incentives to have children when the birth rate is below 2.1 and falling. At present, the incentives only work the other way – having fewer children, if at all, and later in life. This needs to be reversed, but given the state of UK politics and the media, this may take some time.

Aaron Bastani is editor and co-founder of Novara Media.

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