Is Low Fertility a Serious Challenge? Some Learnings from the International Seminar on Low Fertility
Low fertility is a major driver of population ageing and for that reason alone, it is believed to bring up various socioeconomic challenges. The ‘demographic deficit’ of working-age population caused by long-term low fertility raises concerns about a shortage of labour, which can slow down economic growth (Harper 2014). The ratio of old-age population to working-age is fast rising putting in danger the financial sustainability of the welfare state, particularly in the pay-as-you-go pension systems and in the demands on public healthcare. Moreover, lesser number of younger people in the society may lead to less innovation and productivity in industries (Skirbekk 2008), and reduction in the supply of ‘informal carers’ for older adults.
Many countries have long been introducing policies to address low fertility issues, and some of them have established ‘pro-natalism’ as their explicit policy framework. In Western Europe, France has been traditionally in the vanguard of reinforcing familialism and pro-natalist approach in social policy. The French government took a role as a protector of families and provided generous childcare allowances and services for families (Daly 2010). Italy, which has shown one of the lowest fertility rates in Europe, introduced a substantial monetary incentive for childbirths in 2000 (Boccuzzo et al. 2008). Eastern European countries, having experienced steep fertility declines since the 1990s, also strengthened their pro-natalist policies, as Russia established ‘maternity capital’ in 2007 granting one-off benefits of about $6800 for
mothers of second and third childbirths (Luci-Greulich and Thévenon 2013). Within East Asia, South Korea has invested the government budget of more than $100 billion for comprehensive pro-natalist policies in the last 12 years, similar to other East Asian countries with ultra-low fertility.
However, some social scientists argue that the concerns about low fertility are to some extent exaggerated, and it is not necessarily ‘bad’ as aforementioned. Firstly, behavioural changes followed by fertility declines can largely alleviate the presumed economic challenges of low fertility. The concerns about economic burdens in ageing societies are based on the assumptions of traditional social models in many industrial societies, described by obligations of the male-breadwinner families and early retirement of older workers. On the other hand, the contemporary post-industrial economy is represented by increased female education and labour force participation, rising educational investment on children and thereby increased productivity (Bloom et al. 2015; Esping-Andersen 1999). Active ageing in the form of longer working careers, especially for women, can also address the challenge of shrinking working age population (Zaidi et al. 2017). The better employment prospects of traditionally underemployed groups and their enhanced productivity must question the measure of ‘old-age dependency ratio’, which is widely used as an indicator for projecting economic burdens of population structure (Bongaarts 2004). The behavioural adjustments of individuals can lead to a different sense when the ‘real dependency ratio’ is calculated as the number of pensioners divided by that of workers (Spijker and MacInnes 2013), as most older workers will remain longer in their jobs and more working-age individuals will be engaged in the labour market with higher productivity.
Moreover, positive social impacts of the fertility decline should also be appreciated, which are associated with women’s emancipation and their enhanced individual well-being. The rapid fertility decline has been in line with the rising social status of women in many countries. Diversified family compositions in contemporary societies indicate that women are gradually getting away from traditional family obligations at home and have greater individual choices (Upadhyay et al. 2014). Evidence also suggests that moderately low fertility can improve individual well-being, as too many children can have negative effects on subjective happiness of parents and consumptions per capita (Kohler, Behrman and Skytthe 2005;
Margolis and Myrskyla 2011). Lee and Mason’s (2014) economic model shows that the consumption-maximizing level of fertility in advanced economies is around 1.65, which is same to the current level of total fertility rates (TFR) in most of the Northern and Western European countries.
In many countries, a rising migration of younger population also resolves, albeit partly, the declining working age population. Considering all these aspects, low fertility seems not as serious a challenge as often described in public policy articles. Nevertheless, the long-term ‘ultra-low’ fertility can still be a problem, particularly in Eastern Europe and East Asian countries where the TFR has been below 1.3 for almost two decades. In these countries, the problems arise not from the ageing per se, but from the pace of the demographic change. The ‘ultra-low’ level of fertility rates can cause a severe imbalance between age groups in the society, which may bring up massive transition costs and intergenerational tensions. As the social systems including education, labour market, health and pensions were all formed on the basis of the past population structures, the sudden imbalance may not allow enough time for the society to adjust (Lee 2018). Supplementing younger people through active immigration policies as a short-term measure may not be a feasible option in some of these regions, where the societies are closed to migrants due to expected political conflicts and cultural homogeneity. Thus, policy efforts should still be made to raise the TFR up to a moderate level of over 1.5 in these countries.
A number of researchers suggest gender equality as the framework to analyse the causes of low fertility in these regions (Esping-Andersen 2009; McDonald 2013; Anderson and Kohler 2015; Esping-Andersen and Billari 2015; Goldscheider, Bernhardt and Lappegård 2015). The countries in Southern and Eastern Europe and East Asia, all presenting persistent ultra-low fertility, are also considered as ‘laggards’ in terms of gender equality. These countries mark the lowest rates in female employment, men’s involvement in housework, and out-of-home childcare amongst OECD countries, which implies that women in these societies are still strongly bound to the role as caregivers. A new policy approach is required, within which low fertility is to be viewed as a symptom of unequal social structures, rather than emphasizing pro-natalism and financial incentives for childbirths from the economic, developmental angle of population growth.
Acknowledgments
This article is written in reference to the other seminar presentations made by Chulhee Lee(Seoul National University), Tomas Sobotka(Vienna Institute of Demography), Laurent Toulemon(National Institute of Territorial Studies, INET), and Stuart Gietel-Basten(The Hong Kong University of Science and Technology) in the International Seminar on Indicators and Policies of Low Fertility, December 2018, in Seoul, South Korea.
References
Anderson, T. and Kohler, H. (2015) ‘Low Fertility, Socioeconomic Development, and Gender Equity’, Population and Development Review, 41(3), pp. 381–407.
Bloom, D. et al. (2015) ‘Macroeconomic implications of population ageing and selected policy responses’, The Lancet, 385, pp. 647–657.
Boccuzzo, G., Caltabiano, M., Zuanna, G. and Loghi, M. (2008) ‘The impact of the bonus at birth on reproductive behaviour in a lowest-low fertility context: Friuli-Venezia Giulia (Italy), 1989-2005’ Vienna Yearbook of Population Research, 6, pp. 125-147.
Bongaarts, J. (2004) ‘Population Aging and the Rising Cost of Public Pensions’, Population and Development Review, 30(1), pp. 1–23.
Daly, M. (2010) ‘Families versus State and Market’, in Castles, F. et al (eds) The Oxford Handbook of the Welfare State, Oxford: Oxford University Press, pp. 139-151.
Esping-Andersen, G. (1999) Social Foundations of Postindustrial Economies, Oxford: Oxford University Press.
Esping-Andersen, G. (2009) The Incomplete Revolution: Adapting to Women’s New Roles, Cambridge: Polity Press.
Esping-Andersen, G. and Billari, F. (2015) ‘Re-theorizing Family Demographics’, Population and Development Review, 41(1), pp. 1–31.
Goldscheider, F., Bernhardt, E. and Lappegård, T. (2015) ‘The Gender Revolution: A Framework for Understanding Changing Family and Demographic Behavior’, Population and Development Review, 41(2), pp. 207–239.
Harper, S. (2014) ‘Economic and social implications of aging societies’, Science, 346(6209), pp. 587–591.
Kohler, H. P., Behrman, J. R. and Skytthe, A. (2005) ‘Partner + children = Happiness? The effects of partnerships and fertility on well-being’, Population and Development Review, 31(3), pp. 407–445.
Lee, R. and Mason, A. (2014) ‘Is low fertility really a problem? Population aging, dependency, and consumption’, Science, 346(6206), pp. 229–234.
Lee, C. (2018) ‘Policy Responses to Low Fertility and Population Aging: A Population-Policy Perspective’, Health and Welfare Policy Forum, pp. 50-64
Luci-Greulich, A. and Thévenon, O. (2013) ‘The Impact of Family Policies on Fertility Trends in Developed Countries’, European Journal of Population, 29(4), pp. 387–416.
Margolis, R. and Myrskyla, M. (2011) ‘A Global Perspective on Happiness and Fertility A Global Perspective on Happiness and Fertility’, Population and Development Review, 37(1), pp. 29–56.
McDonald, P. (2013) ‘Societal foundations for explaining low fertility: Gender equity’, Demographic Research, 28, pp. 981–994.
Skirbekk, V. (2008) ‘Age and Productivity Capacity: Descriptions, Causes and Policy Options’, Ageing Horizons, (8), pp. 4–12.
Spijker, J. and MacInnes, J. (2013) ‘Population ageing: The timebomb that isn’t?’, BMJ, 347, pp. 1–5.
Upadhyay, U. et al. (2014) ‘Women’s empowerment and fertility: A review of the literature’, Social Science and Medicine, 115, pp. 111–120.
Zaidi, A., Gasior, K., Zolyomi, E., Schmidt, A., Rodrigues, R., & Marin, B. (2017). ‘Measuring active and healthy ageing in Europe.’ Journal of European Social Policy, 27(2), 138–157.
Kun Lee is from Seoul, South Korea, and he previously studied at Seoul National University where he acquired B.A. in Social Welfare and B.A. in Economics. He is currently interested in broad topics covering population ageing and social policy, which involves fertility, health, old-age labour, pension, and social care. He is also looking at comparative labour market institutions and inequality which he could relate to the trends of fertility and marriage.
Asghar Zaidi is a Senior Research Fellow at the Oxford Institute of Population Ageing.
Asghar Zaidi is Professor of Gerontology at Seoul National University, Korea and Visiting Professor at London School of Economics and Political Science, London. Previously, he was Professor in International Social Policy at University of Southampton (UK); Director Research at European Centre Vienna (Austria); Senior Economist at OECD Paris; Civil Servant at UK’s Department for Work and Pensions in London; and Researcher at London School of Economics, University of Oxford, Erasmus University and Tilburg University.
His research spans measurement of active and healthy ageing, the wellbeing of older persons and those with disabilities and data on ageing and older persons. Since 2012, he has led the research work of the Active Ageing Index Project for the European Commission and UNECE and the Global AgeWatch Index project for HelpAge International. He has also developed the Wellbeing in Later Life Index for the UK, working alongside Age UK London.
He has recently completed projects on human rights of older persons (for British Council Islamabad) and on dementia in Pakistan (for Age International UK). He is a Steering Committee member of the ASEM Global Ageing Centre and a member of the Core Group of the Titchfield City Group on Ageing