Throwing money at plunging birth rates won't solve the issue, demography experts say
Financial incentives like baby allowances and cash schemes being rolled out by some countries won't solve the fertility crisis, experts told BI.
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- By 2100, 97% of countries are expected to have fertility rates below replacement levels.
- Demography experts told BI that countries offering financial incentives won't solve this.
- Promoting gender equality might help, but it's unlikely to reverse population decline, they said.
The world is facing a fertility rate crisis, and experts warn that giving financial incentives to would-be parents isn't going to come close to solving it.
A Lancet study forecasts that by 2100, over 97% of countries will have fertility rates below the population replacement level.
Some countries, fearing shrinking populations, have invested heavily in policies in the hopes of reversing the decline.
In Tokyo, the rates are so low that the government is launching a dating app to help citizens find love and get married.
The Japanese government has also tried to boost fertility rates by offering up to a year of parental leave and even cash incentives.
In South Korea, the least fertile country in the world, Seoul is offering people money to reverse their vasectomies or untie their tubes.
That's on top of South Korean companies offering employees up to $75,000 to have children, and a government allowance system that gives all parents with newborns $750 a month until their baby turns one.
However, according to Trent MacNamara, a Texas A&M professor whose work has focused on fertility rates, throwing money at the problem can only do so much.
"Theoretically, it's possible to produce higher fertility with traditional policy," he told Business Insider. "If a government transferred new parents about 5% of the costs of raising a child, we could expect a roughly 5% bump in fertility."
But he noted that such measures come with "backbreaking costs" that governments are hesitant to bear, especially given the strain aging populations place on social welfare systems.
MacNamara said that even in countries like South Korea, which has invested billions, the impact of the policies is still inconclusive.
While governments are scrambling for solutions, none have discovered the holy grail — an affordable, practical policy leading to sustained fertility rate rises, he said.
Sarah Harper, a professor of gerontology and the director of the Oxford Institute of Population Ageing, says that cash incentives have a limited long-term effect.
"It encourages a mini-baby boom, followed by a baby crash, as those women who would have spread their childbearing across several years all go at the same time to get the cash bonus," she told BI.
Harper said that instead of throwing money at the issue, the biggest chance for success is through promoting gender equity.
She said that countries that promote "positive parenting, ensuring that mothers, as well as fathers, can continue their careers through acceptance in the workplace," have the best chance of maintaining birth rates.
However, she added that even this is unlikely to return levels to above-replacement.
Philip N. Cohen, a family demographer at the University of Maryland, said it's a "fool's errand" trying to solve the fertility crisis.
He said that most policy ideas have failed, and besides, "human history in the period of modernity, the last few hundred years, is the history of declining birth rates."
A few unique, ambitious policy ideas could, in theory, make an impact — like a social welfare fund for single mothers and mass immigration from poorer countries—but, Cohen said, they're unlikely to be implemented in most countries.
"That's politically fraught, even if the math of it makes perfect sense," he said.
As for the overall trend, "there's no way I think we can turn that around," he said.