The Potential of Human Beings

Phoebe Arslanagic-Little writes:

Across the world, people are having fewer children. That this demographic phenomenon and its social and economic consequences pose a serious challenge is increasingly understood by policymakers, journalists, and ordinary people. My working life is devoted to talking and thinking about this challenge and what we can do about it. It is heartening to see awareness rapidly increase.

But if previously my efforts were focused on raising awareness of the demographic challenge, now they must be redirected to convincing our leaders that they can do something about it.

A 2023 UN report encapsulates the pessimistic response of many analysts and commentators, describing falling birth rates and ageing societies as an “irreversible trend”. A recent leader article in The Economist also offers a prime example, seemingly written expressly to dissuade policymakers from seriously engaging with falling birth rates as a challenge deserving of their ideas and energies. But how firm is the ground on which these gloomy assessments stand?

The Economist’s central claim is that policies to encourage the birth of more children do not work. This is untrue.

First, the examples it uses to prove this point are curious indeed. Russia is held up as a case of a country where pro-parent policies have not worked. It is true that Putin’s government introduced a range of pro-family policies in 2007. But since then, Russia has experienced a sharply fluctuating youth unemployment rate, three financial crises, a high youth emigration rate, involvement in seven wars, and an attempted coup by a mercenary group. Russia’s military death toll in Ukraine passed 50,000 men in April of this year. This is not a country that offers a useful case study in the efficacy of pro-parent policies.

Second, the article ignores examples of nations that have implemented pro-parent policies and had real success.

Since the 1990s, Czechia has administered a thoughtful, consistent programme of policies intended to make life better and easier for parents. In 2017, these policies were strengthened, including better access to fertility assistance, a family-friendly tax system, and employer incentives to offer flexible working to young parents. Between 1999 and 2021, Czechia has seen its fertility rate increase from 1.13 to 1.83.

Do not dismiss Czechia’s achievement because they have not reached the golden “replacement rate” fertility rate of 2.1 children per woman — the level of fertility that means each generation is as large as the previous one, with no population decline. Economically and socially, the difference between a fertility rate of 1.13 and 1.83 is tremendous for any nation.

Even in the UK’s recent past, we have clear evidence of how government policy has improved birth rates. In 1999, Tony Blair’s government increased social security for families with children, including the introduction of the Working Families Tax Credit. IFS analysis found that these reforms, mostly targeted at low-income families, were responsible for a 15 per cent increase in births in the groups affected, though this was likely not the intention of their architect, Gordon Brown. Again, we see that young families and prospective parents are responsive to national policy efforts that tangibly and positively improve their lives.

The Economist goes on to deride pro-parent policies as “paying women to have babies” and “illiberal”. Yet in the UK, we know we have a “birth gap”, meaning that women have fewer children than they would like. This is a sad, but also important and hopeful data point that offers great cause for political action. Meeting the demographic challenge is not about lobbying people to have children. It is about consistently working to make it easier for everybody to start, support, and grow a family.

Recall that the demographic challenge matters not only for everyone unable to have the family they wish, but for us all. Declining birth rates and an ageing population together exert tremendous financial pressure on a nation, while making it poorer. This is why the OBR projects that State Pension, adult social care, and healthcare costs will account for an astonishing 50 per cent of UK government spending in 2070, up from 35 per cent in 2020. At the same time as these intensifying expenses, lower birth rates mean a smaller workforce and diminishing income from tax revenue.

So, what solution does The Economist offer? In a word, apathy. The article advocates that leaders work to “smooth the way” for the changes falling birth rates will bring. Again, social consequences aside, this will include declining productivity, the massive shrinking of social security, and the compromise of the functioning of major public services.

The Economist argues we must pin our hopes solely on technologies that might ease the pain of declining population but is not similarly optimistic about the potential of human beings. Confidently misanthropic, the piece argues that even policies that do increase birth rates will not be worth it because many children will be born to low-income parents and may not go on to get a university degree.

The demographic challenge facing the UK and much of the world is significant, urgent but tractable. Good evidence indicates that practical, positive policies that make a tangible difference to people’s lives can help people reach their desired family size. This is the message that should galvanise our leaders, and they must not be distracted by doomerism.