Low Fertility: A Discussion Paper

Abstract

The ageing of the population has been of increasing concern to government and society in recent years. However, the focus of this concern is shifting from the absolute increase in numbers of older people (numerical ageing) to falling fertility and the resulting decline in numbers of children being born (structural ageing).

Fertility in Australia, as in all other developed countries, has been falling for a considerable time. In Australia, the total fertility rate (see p. 3 for a definition) has fallen from 3.6 in 1961 to 1.75 in 1999, the lowest level seen in the twentieth century and well below the replacement rate of 2.1. Nevertheless, Australia’s total fertility rate falls in the middle rank of developed countries.

The population will continue to increase for some decades because there will remain large numbers of women of reproductive age having children. However, later cohorts of women are smaller, and as they are likely to have few children and have these later in life, natural increase is expected to begin to fall some time in the 2030s. Immigration will keep the population growing for another 20 years beyond this.

The shift in Australia’s population structure will negatively affect the workforce dependency ratio (that is, the ratio of those in the workforce to those not in the workforce). It will also reduce growth in the proportion and actual population of workforce age, which will ultimately reduce the growth in the working age population (from 180 000 per year to 140 000 over the whole decade commencing around 2020), unless policy or other influences on long-term fertility and participation rates impact soon. There may also be negative impact on economic growth and the availability of social support currently provided by the family. Immigration is able to ameliorate but not reverse this situation. This is principally because immigrants also age and, at numbers above 100 000, they do little to influence the age structure of the population while having a significant impact on total population. The decline in fertility worldwide among developed countries will also increase competition for skilled migrants and reduce sources.

There is evidence that declining fertility is associated with many young women ultimately having fewer children than they would wish. This outcome arises from a range of causes whose relative importance is not yet known. These include the direct and opportunity costs of children; the cultural and institutional framework in which families are created; the impact of gender on the relative responsibilities that women face in having children; and possibly, difficulties in locating an acceptable partner for some groups of men and women.

The changes in the population structure are occurring over very long timeframes. Over the next few decades, the steady rise in population combined with structural ageing will have implications in most policy areas. However, these changes will be gradual and steady and at current levels our fertility rate does not represent a crisis.

We can choose to continue with current policies and deal with the results as they occur or we can attempt to influence the future through changes to current policy.However,we should note that evidence from other developed countries indicates that is possible for fertility to fall far below current levels to points that would have serious ramifications for society and future policy direction. This paper attempts to identify the range of issues that contribute to falling fertility and to point to the general policy directions that might be considered if maintenance of fertility at its current level is to be supported.