Our current ‘baby bust’ will increase the damage when pension timebomb blows

HOW populations change gets a lot of attention. Deaths are one determinant. As the world holds its breath in anticipation of a global pandemic, let’s hope that this matter doesn’t need more in-depth consideration any time soon. For now, let’s look at a usually happier topic: births, and why Ireland’s birth rate is now at the lowest since records began in 1864.

Fertility is a central determinant in population change. It has moved up the agenda, as birth rates almost everywhere have fallen.

According to the United Nations, half of the people alive in the world now live in a country where births are below the level required to stop its population falling in the long run. Fears of overpopulation of the recent past have now given way to crises of depopulation in many countries.

Governments in developed countries, which once shied away from baby-boosting policies, have become more activist. In Ireland, encouraging more births has not yet become a major issue of public policy, even if we have experienced the same downward fertility trend as the rest of the world.

As the accompanying graph shows, Ireland’s birth rate has fallen to its lowest level since records began 156 years ago. Only 12.6 babies were born for every 1,000 people living in the country in 2018, down a third since 2008 and below the previous trough in the 1990s. Latest statistics for the first half of 2019 suggest it has further to fall. The recent legalisation of abortion may accelerate the trend further.

Nevertheless, and despite the record low birth rate, Ireland still ranks high in the European baby league tables. In fact, the Irish had the highest birth rate in the EU in 2018.

Perhaps a better measure of society’s propensity to procreate is the total fertility rate – that is the number of births among women of child-bearing age.

This is where the “replacement rate” of 2.1 babies comes from. In other words, it takes on average 2.1 kids per woman of child-bearing age just to keep a population stable (assuming no inward or outward migration). In every EU country the total fertility rate is now below that threshold. Ireland’s estimated fertility rate was 1.75 in 2018. This, like the birth rate, was the lowest on record, but still above the EU28 average of 1.56. The only countries slightly ahead were France (1.84) and Sweden (1.76).

Much lower fertility rates are to be found in southern Europe, with Spain (1.26) at the bottom of the league table. Other countries – such as Austria, Finland and Germany – are not far behind. And unlike Ireland, these countries have experienced low fertility for decades.

It’s worth noting that Ireland has had a very unusual demographic history. It may be surprising, given our history of big families, but in the latter half of the 19th and early 20th centuries, Ireland had one of the lowest birth rates in Europe.

The main reason for that was low marriage rates – think of those bachelor farmers the writer John B Keane described hilariously and poignantly in his ‘Letters of a Love-Hungry Farmer’.

Another reason for Ireland’s low marriage rates was its high vocation rates – most families in the country had an uncle or aunt, brother or sister in the religious orders.

Among those who did marry, however, the number of children was high, hence the stereotypical big Irish family of yore.

Yet despite these big families, fewer marriages depressed population growth. So did painfully high emigration rates.

All these factors combined meant that Ireland’s population fell almost continually from the Famine until the 1960s. This history was very much at odds with much of Europe at the time, when economies were industrialising and populations rapidly increasing, with the notable exceptions of the two world wars.

It was only in the post-war period when Europe-wide birth rates started to decline sharply. There were several reasons for this, including better education, more liberal policies on family planning and higher labour force participation for women.

In this period, Ireland went from having a relatively low rate of population growth to one of the highest in Europe. The economic growth that accompanied trade liberalisation of the 1960s helped curb emigration and increase population. The result was also a baby boom in the 1970s.

Now Ireland is experiencing a baby bust. When the topic of falling births is raised, it’s sometimes assumed that the trend is unique to Ireland.

The legacies of the recession, the housing crisis and high cost of childcare have discouraged people from bringing more kids into the world.

There is no doubt that these are serious problems. However, Ireland’s baby bust really has to be viewed in wider context.

Fertility rates here are higher than most northern European states, most of whom had milder recessions after 2008/09 and have less severe housing problems. The long-term trend throughout the developed world for fewer children would suggest something deeper going on. It probably reflects that women have more choice when it comes to children and family, not that they are more constrained.

Whether the fall in births can be arrested or reversed is a major public policy question. Several European governments have ramped up spending, offering families lump sums and tax breaks.

A reason to be sceptical that the trend will change is experience in the Nordic countries. Despite great services, parental leave and the like, birth rates continue to fall. It appears that being a better country in which to raise a child does not necessarily mean there will be more of them.

The next Irish government may well introduce a suite of measures to lower the cost of raising children. There are policies that could be argued on their own merits – early-years childcare, for instance. They could benefit children and parents alike.

But given experience elsewhere, don’t expect them to lead to a lot more babies who could, among other things, pay for the explosion in pension spending that is coming down the line as the population ages.

It appears that being a better country in which to raise a child does not mean there will be more of them