Birth rates in nearly every rich country have slipped to historic lows, and no quick-fix tax break or baby bonus seems able to stem the slide.
That is the sobering conclusion of a new National Bureau of Economic Research working paper that tries to answer a question preoccupying demographers from Seoul to Stockholm: Why is fertility so low in high-income nations?
Economists Melissa S. Kearney of the University of Notre Dame and Phillip B. Levine of Wellesley College argue that most public debate focuses on the wrong statistics.
Annual fertility indicators such as the total fertility rate dip whenever women postpone motherhood, giving the illusion of a baby bust that may later reverse.
By following birth cohorts (groups of women born in the same years), the authors show that today’s thirty-somethings are not just delaying childbirth; they are on track to end their fertile years with fewer children than any generation before them. Rising childlessness is a dominant driver of the trend.
‘Shifting Priorities’
Period explanations like recessions, housing crashes, and even pandemics cannot explain a decline that began before the Great Recession and has continued through record-low unemployment, the researchers find. Instead they point to what they call “a broad re-ordering of adult priorities with parenthood occupying a diminished role.”
The shift, they write, reflects changing workplace norms, gender expectations and social values that prize career satisfaction and leisure over large families .
Surveys back up the claim. In the United States, the share of women aged 20-44 who say work is “very important” to them jumped from 32 percent in the mid-2000s to 47 percent by 2020, while only a minority of young adults rank having children near the top of life’s goals.
Similar attitudinal changes are visible in Europe and East Asia.
Why Cash Isn’t King
If modern adults are weighing children against ever-higher opportunity costs, can governments simply pay them to reproduce? Not really, the authors say.
Reviews of child allowances and tax credits from Canada to South Korea show only modest bumps in birth numbers, and mainly among parents who already have one child. “Pro-natal incentives do work,” the paper notes, “but it takes a lot of money.”
Even a benefit equal to ten percent of household income might raise births by at most four percent .
Likewise, incremental fixes that make work-family juggling easier, like longer parental leave or subsidized preschool, help parents keep their jobs but rarely lift completed fertility, especially first births .
The Marriage Piece
Fewer weddings also matter. In nations where out-of-wedlock births remain rare, like Japan, Italy, and South Korea, the collapse of marriage rates has translated almost mechanically into fewer babies.
Yet even in the United States, where non-marital births are common, three-quarters of the post-2007 fertility drop can be mechanically linked to declining marriage, previous work cited in the paper shows .
Policy Implications: Think Big, Think Early
Because fertility decisions are made over decades, Kearney and Levine contend that small, late-stage inducements cannot reverse a trend driven by lifetime calculations.
Effective policies must “influence the decisions women make early in their reproductive lives,” they write, and may need to tackle the underlying clash between demanding careers and intensive parenting norms .
One area with outsized promise, the authors find, is housing. Historic U.S. programs that helped young families buy homes boosted births far more than today’s child-tax credits do, suggesting that making starter housing affordable could indirectly raise fertility .
No Silver Bullet
Still, the researchers caution, “there is no single policy lever that will reliably boost fertility.”
Until societies reconcile gender roles at home, soften the career penalties of parenthood or address the cultural appeal of child-free life, the baby bust is likely to continue.
For aging economies worried about shrinking workforces and soaring pension costs, that conclusion is unsettling.
Yet Kearney and Levine’s analysis leaves room for optimism: if low fertility is partly about shifting values, values can shift again.
The question is whether governments—and voters—are ready to make parenthood a collective priority.