How to Increase Birth Rates in the EU
by Dr Michael Schluter and Matthew Ferguson
Context
The European Union faces a steadily worsening population challenge. The current average fertility rate of EU Member States, at around 1.46 per woman, is well below the level of 2.07 required to maintain current population levels. At the same time, European countries are ageing: a rising old-age dependency ratio (ODR) means there are fewer young people to provide financial support for each elderly person directly, and indirectly through payment of taxes.[1] These twin pressures of a falling birth rate and a growing elderly population lead to a demographic decline, which will be one of, if not the, most significant challenges faced by the EU in this century.
EU institutions and Member States are alert to the severity of this crisis. In many EU countries, young parents enjoy wide-ranging government support, including income tax cuts, generous grants, interest-free loans, free childcare and lengthy parental leave. Yet none of these measures have come close to raising fertility rates to replacement level. What are EU leaders getting wrong?
Member States have predominantly treated demographic decline as an economic and financial issue. And not without justification: modern pressures like the cost of housing, student debt and stagnant real wages are hardly conducive to starting families. Governments seek to respond to these pressures because they appear solvable by conventional state action: grants, tax incentives and new labour laws. Yet across the world the evidence is clear: alleviating the financial burden of parents alone is insufficient to increase birth rates.
This is because demographic decline is caused by a multiplicity of factors, including some which are cultural, social, and ideological, rather than simply economic. Relieving parents’ financial burdens without tackling the other “forces of decline” will not turn the tide in the EU. What is required is an integrated, relationships-centred approach that confronts each of these forces and creates a society where families and local communities are encouraged, empowered and celebrated.
Why it Matters
Already healthcare is under severe strain in many EU member states [2,3,4]. A regional report published by the World Health Organization (WHO) for Europe in September 2022 warned of a “ticking timebomb” threatening health systems in Europe and Central Asia. [5] Despite record migration into EU countries like Germany, sustained low birth rates over past decades have made the proportion of the elderly population rise sharply. [6] Compounding this issue is that, while people now live longer, those years are spent in increasingly poor health, making old-age care more expensive in money and time.[7] Moreover, this becomes a global issue as wealthy Western countries resort to “poaching” trained medical staff from low-income countries.[8]
However, for economic, cultural and ideological reasons there is hesitation to state clearly that the challenges faced by our strained health services result precisely from low birth rates – the blame is more often laid at the door of political or fiscal failure. Indeed, there is a persistent idea in European culture that there are no adverse consequences in later life for the choice not to have children. As a result, people’s expectations regarding availability of care and services in the future will clash with reality. However, it will be the children of tomorrow that will pay the price for our choices today, in terms of shouldering increased taxes and caring responsibilities.
There is, therefore, a tension between the free choice of individuals to make childbearing decisions today and the responsibility of governments to ensure adequate care and health provision for older people in the future. This is something which the EU will have to learn to navigate.
Many assume that people’s major concern about having children, or having more children, is simply the cost. However, arguably for many the primary issue is the additional time required to nurture them at home, transport them to school, and engage them in conversation to understand their concerns and perspectives. Each child needs to receive some amount of time and attention separately from their siblings; this amount of time will differ from one child to another. Yet, for many people today, time is their scarcest resource.
Younger generations, especially those of working age, need to ensure both time to care for the needs of their own older relatives, as well as earning sufficient income, and thus also paying sufficient tax, to meet the costs of pensions and health services provided by state-funded hospitals and primary healthcare for all older people. Given that parents are increasingly raising families in middle age, they are often caring for elderly relatives and children simultaneously – dubbed the “sandwich generation”, with time and financial pressures on two fronts.
Current policies of EU Member States to rely on increased immigration to provide the necessary workforce for industry and services due to low birth rates create the danger of political and social instability within the EU as residents become increasingly anxious about immigrant numbers and move towards right-wing political parties to halt immigration.
Dependence on mobility of labour to meet national labour shortages within the EU results in many families being separated from their extended family support networks (grandparents, aunts/uncles etc.), who thus postpone the decision to have children due to concern about the time required to care for them.
A high ODR increases pressure on EU and national budgets. In the long term it threatens EU financial stability, and hinders the opportunity to reduce the current high levels of national and European debt.
Smaller numbers of men and women of military age are likely to undermine long-term military security of the EU as a whole.
Some key ways to increase birth rates in the EU could include the following:
Governments need to attach greater importance to Family Policy. At present only a handful of EU Member States have a dedicated Minister for the Family in the Cabinet. Moreover, no country is carrying out comprehensive family impact assessments of government legislation or regulations. To increase birth rates, governments will need to evaluate all of their decisions, in terms of not only their impact on national and local budgets, but also how they will impact on ‘family time’ (where family is defined as those linked by blood, marriage, civil partnership or adoption). Too often, families have been collateral damage of otherwise well-intentioned policies to promote economic growth, such as focusing economic development in urban areas and thereby requiring geographic mobility of families.
Reducing time pressure on working parents is likely to increase birth rates. It seems that a major reason that couples do not have children, or do not have more children, is due to the time pressures inherent in modern society. Time pressures have increased due to higher commuting times, an out-of-hours working culture facilitated by remote working, the need for two incomes to buy or rent property, and the time demands of social media. Governments need to examine ways to reduce time pressures on all adults, and especially those who either have, or wish to have, children.
Incentivise colocation of relatives. Time pressure on parents when children are young can be reduced by encouraging relatives to live nearby. Tax incentives can encourage colocation of relatives, as in Singapore [9], and reduced mobility of labour which adds huge stress in family relationships. When children are young, elderly relatives can help provide care for them; when the children are somewhat older, they can in turn help provide care for their elderly relatives. A corollary of this policy is promoting regional and rural development, avoiding economic concentration in major cities. In addition, reduced mobility of labour may be achieved by incentivising students to attend local universities so that they can live at home and graduate with less debt.
Corporate decision-making to pay greater attention to the impact on families. The corporate capitalism model in the West focuses narrowly on the rights and interests of shareholders, and often underplays obligations to the workforce, suppliers and customers. It also pays little attention to the community in terms of concern about long-term sustainability of families, societies and the environment. One way to change company decision-making to prioritise more highly the well-being of families would be to redefine the purpose of the company so that it does not primarily serve the interests of shareholders but also those of the workforce and other stakeholders. For example, to redefine the purpose of a company in legislation as set out in the paragraph below might have the effect of greater attention being given by directors to the working hours and well-being of employees, with a knock-on effect on families of employees and perhaps also birth rates. The purpose of a company might read as follows:
‘The purpose of a company is to serve society by maximising long-term value creation in the interests of its employees, shareholders, customers and suppliers, while ensuring the sustainability of the business and honouring its wider responsibilities to local communities and the environment.’ [10]
Change the focus of the education system. Many countries in the EU still have an education system which focuses narrowly on individual achievement in academic subjects, in preparation for university or vocational qualifications. There is relatively little emphasis on teaching that a person’s longevity, well-being and success through life depends on the quality of relationships with their family, as well as with their friends and community. [11, 12] So, children growing up are not generally taught to recognise the benefits of having siblings, uncles/aunts and cousins in terms of the support that larger families can provide through all the different stages of life. Neither are teenagers taught about the decline in fertility with age, leading to widespread misconceptions about having children in middle age and IVF success rates. [13] The EU and its Member States need to consider both the culture and the curriculum of schools if they want to enhance relational literacy and increase birth rates.
Encourage a culture of relational rights rather than individual rights. Human rights are still being taught in schools and articulated in legislation in a way which focuses on the individual and creates an attitude of entitlement. There is no attempt to balance a person’s rights with their responsibilities in the context of families and communities. As discussed, there is a hesitation to suggest that childbearing is anything other than an individual choice, and that there might be an element of social responsibility in choosing to have children. Arguably, there is a need to teach teenagers in schools that society works best for everybody when each person does not only think of what is good for them, but also considers the impact of their personal decisions on the community as a whole, down the generations. Just as the youth of today have become “climate-conscious” in wanting to preserve the future of the planet, so we must not neglect the needs of these societies which will inhabit that planet. So human rights need to be reframed as ‘relational rights’ which place the individual’s rights in the context of intercommunal and intergenerational relationships, with implied responsibilities which match those rights.[14]
Conclusion
Reversing or even stemming demographic decline will be an enormous undertaking. But the EU is not alone in this task: since 2022 over two thirds of the global population live in countries with fertility rates below replacement level – including four of the five biggest countries. [15] The UN projects over 30 countries to lose half their current population by the century’s end.16 For many countries, demographic decline will cause substantial strain for public services and state functioning; for others, like South Korea with its fertility rate of 0.72 births per woman, the threat is existential.
Yet hope is not lost. We believe that, in addition to economic inequities, the breakdown of relationships across society has played a central role in our demographic malaise: relationships between men and women, parents and children, the young and the elderly, government and citizens, employers and employees. Often, governments have been reluctant to interfere in this “personal” terrain. However, if families and local communities – historically the bedrock of childrearing – are not revitalised, then no increase in government spending will return our countries to replacement level birth rates. It is time for a creative, comprehensive and above all relationships-centred agenda, one infused with a celebratory spirit towards the creation of new life. We believe that the proposals outlined in this paper would go a long way towards achieving that goal.
Join our webinar on December 12th at 7:30pm (UK time) with Matthew Ferguson, on “A family-centred Europe as the solution to the demographic challenge.” Register here!
The views and opinions expressed above are those of the author alone and do not necessarily reflect those of the Jubilee Centre or its trustees.
[1] https://ec.europa.eu/eurostat/web/products-eurostat-news/-/edn-20210930-1
[6] https://data.worldbank.org/indicator/SP.POP.DPND.OL?locations=DE
[7] https://www.sciencedaily.com/releases/2016/04/160415103502.htm
[9] This refers to either the older relatives moving closer to the younger relatives or vice versa. See Ministry of Finance in Singapore, Tax Incentives, Care for Aged Parents via tax relief.
[10] See Dr Michael Schluter, Is Corporate Capitalism the Best We’ve Got to Offer? (2022).
[11] Nor is there any deliberate teaching of ‘relational literacy’, i.e. how to relate to people with different ideas, values, or ethnic/racial backgrounds.
[12] https://relationalschools.org/research/case-studies/
[13] https://pmc.ncbi.nlm.nih.gov/articles/PMC7721003/
[14] See Emily Ho et al, Relational Rights: An alternative world-inclusive and relationship-affirming understanding of human rights.