Study: Declining birth rate in some major economies shows signs of easing

March 21, 2013

The decline in birth rates in some of the world’s largest economies shows signs of stalling, and in some cases reversing, a new study shows, giving some relief to governments struggling to finance old-age provisions with taxes from a shrinking workforce.

Research from the Max Planck Institute for Demographic Research, in Germany, found that previous methods of calculating the number of births a woman will have over her lifetime do not take into account the fact that women are having babies later.

“Calculating fertility is made more complicated by the changes in the timing of births,” said Joshua Goldstein, one of the researchers who worked on the study.

Overall, the study, which looked at fertility rates in 37 developed economies, found that traditional methods of counting had underestimated the number of births per woman by about 20 percent. In particular, fertility is rising in the English-speaking world, with Britain, the United States, Australia, Ireland and New Zealand all likely to have sufficient births per woman to at least keep populations from falling in years ahead.

However, the trend is not apparent everywhere; Italy, Singapore, Japan and Spain still have very low fertility rates. And where these are stabilizing, they are still too low to hold populations steady. That requires birth rates of about 2.1 per woman.

The study noted that the reasons for changes in fertility rates are not well understood but pointed to other research that suggest that gender equality, family and labor policies and economic and human development play a role.

“These results suggest that the long-term fertility decline in the developed world has come to an end or at least stalled,” the study concluded. “[This] confirms that much of the very low fertility is the result of later, not less, childbearing.”

The trend is certain to be welcome news for economies struggling with rising dependency ratios, a term used to describe the number of people of working age who are paying taxes relative to the number of elderly, inactive retirees. Sharply longer lives have driven up the costs of health care, while falling fertility is reducing the number of taxpayers.

The study reached its conclusion by looking not at the trend among women in the population as a whole but rather at birth cohorts from 1962 through 1979. Steeply falling fertility became apparent in the 1970s, but much of that drop came as women began to enter university and the workforce, postponing, but not averting, childbirth.

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