Why Families Are Having Fewer Children

The economic forces behind falling birth rates around the world, from education and urbanisation to the rising cost of time.

Around the world, families are having fewer children than in the past. The global fertility rate, the average number of children a woman is expected to have over her lifetime, has fallen from around five in the 1950s to around two and a quarter today, according to United Nations estimates. Many countries are now below the replacement rate of about 2.1, the level needed to keep a population stable without migration.

The demographic transition

Demographers describe a common pattern called the demographic transition. First, death rates fall as nutrition, sanitation and medicine improve. Populations grow quickly. Later, birth rates fall too, and growth slows. Most rich countries completed this transition during the twentieth century, and many middle-income countries have since followed.

Economic explanations

Economists point to several forces:

Child survival: when fewer children die young, parents do not need as many births to reach the family size they want.
The cost of time: as women gain education and better-paid jobs, the opportunity cost of time spent raising children rises.
Urbanisation: on farms, children can help with work from a young age. In cities, children are more costly and contribute less income.
Old-age security: pensions and savings reduce the need to rely on many children for support in old age.
The quantity-quality trade-off: Gary Becker argued that as the return to education rises, parents choose to invest more in each of fewer children.

South Korea's record low

South Korea's fertility rate has fallen to among the lowest in the world, below 0.8 children per woman in recent years. Researchers point to very high housing and education costs, long working hours, and the difficulty many women face in combining careers with parenthood. The government has spent heavily on incentives to have children, with limited success so far.

Why it matters

Falling fertility means ageing populations, fewer workers per retiree, and pressure on pension and health systems. At the same time, smaller families often mean more investment per child and more opportunities for women.

Thinking cash bonuses easily reverse the trend

Many governments offer baby bonuses or tax breaks to encourage births. Evidence suggests these often have modest effects, sometimes changing the timing of births more than the total number. The deeper drivers, like the cost of time and housing, are harder to change.

Key takeaways

The global fertility rate has fallen from around five to around two and a quarter since the 1950s.
Many countries are now below the replacement rate of about 2.1 children per woman.
Child survival, the cost of time, urbanisation and pensions all push fertility down.
Cash incentives to raise birth rates have usually had only modest effects.