Exploring Norway's Fertility, Work, and Family Policy Trends

Report

20 June 2023

2. Family formation in Norway

Maja Gustafsson

Abstract

This chapter outlines the trends in fertility in Norway and some comparator countries over the past decades. It shows that fertility rates fell after 2009 and throughout the 2010s. It goes on to explain that this decline was in large part related to a decline in first births. While more women wait, or avoid, having children, the two‑child norm is still strong among Norwegians. The chapter also looks at changes in living arrangements among young adults, and ends with considering increased pressures on household budgets as related to rising housing costs.

2.1. Introduction and main findings

Despite a steady economy and a solid welfare net, Norway – like many other OECD countries – finds itself with low fertility rates, which has caused policy experts, academics and politicians alike to seek explanations for the recent fall in births. Low fertility can have both personal implications if it means that those who want children can’t have any, and have national implications, in terms of economic and societal effects as related to population ageing, as well as pressures on the welfare state.

This chapter lays out the history and current situation of falling birth rates in Norway by first illustrating that people – and people in their 20s in particular – have been opting for smaller families in Norway since the financial crisis of 2007/08.1 It goes on to consider how family structures have changed more broadly in Norway over the same period.

After relatively stable fertility rates between 1990 and 2009, the number of births per woman dropped suddenly and kept falling over the course of the 2010s. The falls since 2009 are driven by a smaller number of first births. Births at higher parities – that is, more than one child in the same family – have become less likely as well, and this is part of a longer-term trend towards smaller families. The two‑child norm remains strong in Norway, and many women who have already had one child choose to have one more. Many families also choose to stop at two children, without extending their families to three or more children. This trend became poignant during the COVID‑19 pandemic, when the small upswing in births observed happened among women who already had one child. The pandemic might therefore have been seen as a good opportunity to have the second child, as planned.

The “typical” family is becoming less common with adults in their 20s increasingly less likely to live with a partner. This is important because being in a partnership – and especially a stable relationship – is a key precondition to people’s intention to have children. Sufficient family housing is often precondition for family formation, but the growth in housing costs – both house prices and rent prices – have outgrown increases in wages and put a pressure on the household budgets of people. High costs have been especially keenly felt for lower-income families and young people.

2.2. People have been opting for smaller families over the past decade

People in Norway have been opting for smaller families since 2009, with fertility in Norway now lower than all the other Nordic countries except for Finland. The large falls in Norway are mainly due to a fall in birth rates among people in their 20s – a postponement of first births – while the desire for a two‑child family is still strong. It is yet unclear whether births will catch up or whether the low fertility is a lasting feature in Norway.

2.2.1. Fertility rates in Norway have dropped over the past decade

Historically, fertility rates in Norway have been high relative to other OECD countries. The Total Fertility Rate (TFR) is perhaps the most common way to estimate current number of births per woman. It refers to the total number of children that would be born to each woman if she were to live to the end of her childbearing years and give birth to children in alignment with the prevailing age‑specific fertility rates. In the late‑2000s, the TFR in Norway was consistently higher than the OECD-wide TFR, like its Nordic neighbours (Figure 2.1). The “Nordic model” of supportive family policies and gender equal attitudes was good at keeping birth rates up, even in the face of falling birth rates in the rest of the OECD (Ellingsæter, 2012[1]).

Figure 2.1. The fertility rate in Norway was relatively stable before dropping in the 2010s

However, since 2009, the TFR has fallen dramatically in Norway and some other countries, including Finland, Iceland, Ireland, New Zealand, and Norway’s most recent TFR is below the OECD average (Figure 2.2). Since hitting a 45‑year peak of 1.98 children per woman in 2009, Norway’s TFR declined by 0.50, to 1.48, in 2020; the TFR increased to 1.55 in 2021 to drop to 1.41 in 2022. The 2020‑ low in Norway is well below the 2020 figure in France (1.79) – a country with pro-natalist elements in its family policy – and the OECD average in 2020 (1.59) (Figure 2.2). Norway’s fall in TFR is similar to falls in Finland where TFR has collapsed by 0.49 since 2009, to 1.37 in 2020 and in New Zealand it has fallen by 0.52 since 2009 to 1.61 in 2020. Norway’s other Nordic neighbours Denmark, Sweden and Iceland have also experienced falls in the birth rate. Nonetheless, their TFRs remain higher than the OECD average, at 1.67 in Denmark; 1.72 in Iceland; and 1.66 in Sweden (Figure 2.2).

A sustained fall in births would contribute to an increasing pressure on the welfare state that also arises in part from increased longevity. Life expectancy at birth has been steadily increasing in Norway since 1960 and was in 2020 the third highest in in the OECD, at 83.3 years, only lower than in Japan and Korea (OECD, 2022[2]). An ageing population with increased numbers of people in retirement means that the proportion of people who are economically active falls relative to those who are not. This puts increasing fiscal pressures on the welfare state (Chapter 6).

Figure 2.2. During the 2010s, TFRs fell most in Finland, Iceland, Ireland, New Zealand, and Norway

2.2.2. Falls in first births contribute to recent drops in fertility in Norway

The number of children per woman has decreased across all ages, but the greatest falls observed for women aged 25 and 30 arise out of the increasing number of women who are without children in this cohort (see, for example (Ellingsæter, 2017[3]; Dommermuth and Lappegård, 2017[4]; Comolli et al., 2021[5]) and Chapter 5). Overall, the average number of children born to 30‑year‑old woman fell from 1.0 in 2010 to 0.8 in 2021 and from 0.4 to 0.2 per 25‑year‑old woman. Women aged 35, 40 and 45 have had a slightly smaller decrease in births (Statistics Norway, 2022[6]). The most important reason behind the considerable falls in births to younger cohort is an increase in the number of women without any children (Figure 2.3). The proportion of 25‑year‑olds without any children increased by 13 percentage points to 85% between 2010 and 2021, and for 30‑year‑olds the corresponding increase was 11 percentage points to 52% between 2010 and 2021.

The increase in the share of women who do not have any children should be thought of in the context of a wider trend of delays in first births. Births have been delayed into older ages across almost all countries in the OECD, and Norway is no exception. The mean age when mothers have their children increased by 1.2 years across the OECD, from 29.5 in 2009 to 30.7 in 2020. In Norway, the age at which mothers have their children increased by 1.4 years between 2009 and 2020, from 30.0 to 31.4 (Figure 2.4).

Figure 2.3. More 25‑ and 30‑year‑olds remain without children today than 10 years ago

Figure 2.4. Women across the OECD have their children later, and Norway is no exception

Although the share of women without children has increased and the number of children that women tend to have on average has fallen for younger women, it is births in the higher parities that have declined for older women. According to Statistics Norway, along with increases in the share of women without children (2 percentage points), the proportion of 40‑year‑old women with one or two children increased (2 percentage points) between 2010 and 2021 while fewer women had three or more children. Having two children is still the most common outcome for 40‑year‑olds, with 42% having two children in 2021, up from 41% in 2010 (Statistics Norway, 2022[6]).

The share of men without children has increased as well, but from a higher base. The share of 25‑year‑old men without children increased by 6 percentage points to 93% and among 30‑year‑olds increased by 8 percentage points to 69% between 2010 and 2021. By the age of 45, over a quarter of men remained without children (26%) in 2021, up by 3 percentage points compared to a decade ago. Having two children is still the most common outcome among 45‑year‑old men, although just a little under 36% achieve this, up from 34% in 2010 (Statistics Norway, 2022[6]).

2.3. The two‑child norm is strong in Norway

2.3.1. Having two children is the most common family choice

The two‑child norm remains strong in Norway even if not everyone achieves it in practice by the end of a typical reproductive life. Figure 2.5 shows that two children is the most common ideal family size, and this desire is similar for people in their early 30s and 40s. At age 30‑34 most women and men report thinking that they ideally would like two or more children, even though most of them do not yet have any children at that point in their lives. Nonetheless, more people than had ideally wished for it tend to end up with smaller families towards the end of their reproductive life at ages 40‑44. While 88% ideally want two or more children at age 40‑44, only 72% had achieved it in 2020 (Figure 2.5). The higher number of desired children compared to achieved children is not unique to Norway either by geography or time; people consistently state that they ideally would like more children than they subsequently end up having (OECD, 2022[7]).

Figure 2.5. Respondents in their early 30s and 40s have a similar ideal number of children

Despite having clear goals about the number of children wanted, many people seem to have a fairly relaxed attitude to whether they actually have another child. Just a little over half of 25‑ to 44‑year‑old male respondents (52%) actively intended to have a(nother) baby when they conceived their youngest child and only 56% of 25‑ to 44‑year‑old female respondents had intended this. The rest did not intend to conceive or were relaxed about the outcome (Figure 2.6).

While the number of unintended pregnancies might seem high, it should be seen in the wider context of falling rates of unintended pregnancies (Bearak et al., 2020[8]). Indeed, some have gone as far as to conclude that the fall in births, especially among lower-educated adults, has been largely due to an increase in information and availability of contraception and therefore a decrease in unintended births (Ciganda, Lorenti and Dommermuth, 2021[9]). It is good that unintentional births have fallen in Norway and elsewhere. For instance, the number of births stemming from teenage pregnancies is among the lowest in the OECD in Norway, only after Korea and Denmark (OECD, 2022[7]). The fact that people can plan their lives and their childbirths better today than in the past should be appreciated, and work should continue to make sure that everyone has a right to advice and access to contraceptives without stigma or taboo.

Figure 2.6. Nearly 3‑in‑10 responding parents in Norway did not intend to conceive their youngest child

2.3.2. More siblings, not first-borns, during COVID‑19

Increased economic uncertainties due to the economic crisis that ensued from the policy response to the COVID‑19 pandemic suggest that births could decline further, but births in Norway in fact increased slightly (Aassve et al., 2021[10]). Figure 2.7 shows that births per person started to increase slightly in the first quarter of 2021, approximately 9 months after the COVID‑19 pandemic broke out in the end of the first quarter of 2020. Compared to the year before, births then fell in 2022.

It should not be taken to mean that this slight increase is the beginning of a trend reversal. While the fall in birth rates over the 2010s has largely been a result of the increase of women (not yet 30 years of age) without children, the pandemic resulted in a significant increase in births among women who already had at least one child and/or those that faced relatively secure economic and labour market conditions. There was no positive effect of the pandemic on women who have not yet had a child, and the trend of increasing maternal age at first birth continued in 2021 (Lappegård et al., 2022[11]; Sobotka et al., 2022[12]). Thus, there was no catch-up effects in first births. The increase in births could therefore be seen as a result of the prevailing two‑child norm: parents who wanted a second child anyway thought the work-from-home flexibilities that were extended during the pandemic offered a good opportunity to extend the family. Alternatively, it was seen as a good time to take parental leave, as some work slowed down due to social distancing measures (Neyer et al., 2022[13]). It is unclear whether – and if so how – longer-term worries about the political, economic and security concerns that arise in the aftermath of the COVID‑19 crisis, high inflation, and Russia’s war of aggression in Ukraine will affect family formation in Norway.

Figure 2.7. The annual change in birth rates remained positive through 2021

2.3.3. TFR can stabilise somewhat if new trends largely reflect delays

The TFR is likely to catch up somewhat if and when delays stabilise

So far, there have been no changes to completed fertility rates, which measures the number of children per women at the end of her reproductive years (here taken to be age 44‑50). Both women in the birth cohorts 1960 and 1970 have experienced a completed fertility rate of 2.1 in Norway. For the cohort born 1970, this was the fourth highest for which we have accessible data, only after Iceland (2.3), the United States (2.1) and Northern Ireland (2.1). It remained higher than Sweden (2.0), Denmark (2.0) and Finland (1.9), and significantly higher than the lowest-ranking countries Spain (1.5) and Japan (1.5) (OECD, 2022[7]). The stable completed fertility rate reflects the fact that the TFR remained stable in Norway up until the 2010s. Changes to fertility behaviour among women in their late 20s and early 30s from 2010 onwards will therefore not have been captured when considering women aged 44‑50 today. In order to see any effect on completed fertility rates, we will have to wait a while longer.

While completed fertility rates cannot accurately capture the most recent birth trends, it is also likely that the TFR underestimates the actual fertility rate. This happens per definition when there is a general delay in the decision to have a child. The TFR estimates the current birth rate by assuming that young women who have not yet reached the end of their fertility (usually taken as 45 years of age) will live out their fertile years in alignment with current age‑specific fertility. That means that even if young women today end up having a similar number of children at 45 as mothers did a decade prior, if births consistently occur later in women’s lives, the TFR will underestimate the number of births per woman. This is because the calculation to for the TFR assumes that the timing of births across the life course is the same for the current generation as for the previous generation.

To account for this, the tempo‑adjusted fertility rate attempts to adjust for such tempo effects in birth rates by using a model that accounts for the timing and parity of births, giving a more accurate indicator of current birth rates (Human Fertility Database, 2015[14]). The tempo‑adjusted fertility rate suggests that the actual number of births in Norway is not quite as low as the headline TFR indicates at first sight. The tempo‑adjusted TFR is still relatively high and has not declined as fast as the TFR (Figure 2.8). The tempo‑adjusted TFR was only slightly lower in 2019 in Norway than in its Nordic neighbours Denmark, Iceland, and Sweden. The tempo‑adjusted rate fell by 0.32 children per woman, from 2.21 in 2010 to 1.89 in 2019 in Norway. This fall can be compared to other countries with similar falls, such as the Slovak Republic (0.31), Iceland (0.28) and Spain (0.28). The largest falls were seen in Finland (0.48) and United States (0.42). This is consistent with previous research that finds that tempo effects cannot explain the full size of the fall in TFR (Hellstrand et al., 2021[15]).

Figure 2.8. Tempo‑adjusted total fertility rates suggest a much smaller fall than the TFR

Having children becomes somewhat less probable with age, but not unrealistic

It seems possible that a delay in births might mean that some women and men become biologically unable to have children due to their age. This might be especially true for higher-order births rather than first births, if women decide to start their families later in life. Indeed, survey work suggests that there might be something to this. Despite being a leader in terms of healthcare with heavily subsidised IVF options (Fernandes et al., 2020[16]), the answer “we did not succeed in having (more) children” in a recent survey was the third most common response (after “I didn’t want more children” and “my partner didn’t want more children”) to why respondents had not had another child (Cools and Strøm, 2020[17]).

However, in a report to the Norwegian Ministry of Children and Families, there is little concern about couples starting a family “too late”, and this view seems to hold out in research. Ellingsæter (2017[3]) maintains that later births are not necessarily a problem, but that it is a good thing that young adults have time to transition into adulthood and take their time to establish relationship, develop jobs and careers and form independent identities (Ellingsæter, 2017[3]). The report claims that young adults can easily wait until their early to mid-thirties before they have their first child. Other research supports this idea. One study finds that 82% of 35‑to‑39‑year‑old women conceive within a year of trying, compared with 86‑87% of 27‑to‑34‑year‑olds, with roughly half of those who did not succeed the first year being able to conceive the following year (Dunson, Baird and Colombo, 2004[18]) – see also (Rothman et al., 2013[19]).

2.4. The “typical family” is not so typical, at least among young adults

Family composition is changing in Norway, with young people moving in with their partners later in life and relationships breaking up more often in Norway than in other OECD countries. More children in Norway than elsewhere tend to live with single parents, but as will be seen in the next section, this does not seem to translate into more children living in precarious economic conditions.

2.4.1. Adults have become less likely live with a partner in their 20s

Overall, the proportion of people who live together as couples in Norway is lower today than it was a decade ago. Falls in living with a partner as cohabitees or married partners can be observed for all age groups (with the exception of 35‑ to 39‑year‑olds where these rates remained at the same level) but are especially notable for people under the age of 30. Only 24% of 20‑ to 24‑year‑olds lived with a spouse or cohabiting partner in 2017‑19, compared to 31% in 2008‑10. The fall was also considerable for 25‑ to 29‑year‑olds. Just 51% lived with a partner in 2017‑19, a fall from 59% in 2008‑10 (Figure 2.9). This cohabitation pattern whereby the greatest changes have occurred for people in their 20s mirror changes in fertility rate, where the greatest falls were also seen among women aged 25 and 30.

Figure 2.9. Adults in their 20s have delayed moving in with a partner

Since house prices and rental prices have risen dramatically in many OECD countries, the decline in partnership formation among people in their 20s may be due to more young people living with their parents, but data does not bear this out (OECD, 2022[20]). Living with parents can for some young people be the only way to deal with a situation of high rental prices and insecure jobs that are few and far between. However, Norway, Denmark and Finland have the lowest proportions of young people living with their parents (OECD, 2022[20]), and as Figure 2.10 shows, the proportion of 20‑29 year‑olds living on their own is higher in Norway (44%) than in any other OECD country where data is available. This proportion actually increased in Norway between 2010 and 2020, as it did in Sweden and Finland over the same period.

Figure 2.10. More young adults in Norway live on their own than across other OECD countries

2.4.2. A stable, cohabiting partner is for many a precondition for having children

Living with a partner is for many a precondition for deciding to have a(nother) child, so prime‑age adults are more likely to have children – and to intend to have children – when they live with a partner, whether as legal spouses or as cohabitees (Cools and Strøm, 2020[17]; Hellstrand, Nisén and Myrskylä, 2022[21]). This could be because people who have a stronger desire for children spend more time and energy working on their partnership and/or because it is easier to envision having children when in a stable partnership (Hellstrand, Nisén and Myrskylä, 2022[21]).

These trends can also be observed for children currently present in households. Adults aged 25‑44 living with their partners either as cohabitants or as legal spouses are more likely to have children (71%), compared to people who are single or not living with their partner (26%) (Figure 2.11).

Figure 2.11. Responding cohabitees tend to have more children than separated partners and single adults

Delays in partnership formation can only explain a part of the in births, and decision-making within couples may matter even more. Research from Finland shows that delays in formation and dissolution of partnerships caused around one‑quarter of the fall in births after 2010, whereas falls in births within partnerships drove three‑quarters of the decline (Hellstrand, Nisén and Myrskylä, 2022[21]).

The stability and satisfaction with relationships are importance to the intention to have a(nother) child. Being a parent of a young child after a relationship rupture can have undesirable effects for various reasons, including psychological challenges, social implications and financial difficulties. Adults aged 25‑44 are more likely to be intending to have a(nother) child within three years when they are satisfied with their relationship than when they are not so satisfied: 30% of respondents reporting to be satisfied (scoring their level of satisfaction between 6 and 10) in their relationship intend to have a(nother) child within three years, and 14% are unsure (excluding respondents choosing not to reply or answering “don’t know”). By contrast, those who are not satisfied in their relationship or finding it “average” (scoring their level of satisfaction between 0 and 5) are equally likely to report that they are unsure about their fertility intentions as they are to report that they are intending to have a(nother) child (18%) (GGS, 2020[22]). Fertility intentions have been shown to matter for outcomes: fertility intentions for the coming three years correlate with outcomes four years after the survey date (Dommermuth, Klobas and Lappegård, 2015[23]).

Insecurity about whether partners can trust each other can have dampening effects on fertility as some people are hesitant to start a family when they are not sure about their relationship with their current partner (Jensen, 2016[24]). Worries about relationship rupture may be well-founded: one‑in-four children live in families where the two parents no longer live together (Amundsen, 2019[25]) Increasingly, children of separated parents in Norway have dual residences and share their time between each parent, with a 50/50 split being seen as the fairest option for both children and parents (Kitterød and Lidén, 2020[26]). Having multiple stable relationships over adult lives may also mean that people are more inclined to have a(nother) child. Having child(ren) together with a partner is often seen as a way to formalise the relationship, especially in societies like that in Norway where marriage has lost much of its importance as a way to signal the permanency of a union (Lappegård and Noack, 2015[27]).

There are some differences in partnership behaviour across socio-economic groups of young people. Qualitative work found a class divide among men in attitudes toward the value of forming partnerships. The majority of the upper-middle‑class men in the study lived with a partner and a few of the singles had just come out of long-term relationships. By contrast, the majority of working-class young men were single, and those who were in relationships had been in them for a relatively short time or treated them in a more casual way (Jensen, 2016[24]).

2.5. Housing costs pressure budgets, especially among lower-wage families

Families need somewhere to live, so it is important to understand how people are faring in terms of their budget and prospects to achieve typical life milestones such as moving into a family home and/or buying a house. Indeed, survey evidence supports the idea overall household budgets are important fertility decisions: 78% respondents in a recent survey in Norway say that they want to be financially comfortable before having children (Cools and Strøm, 2020[17]). This section also includes some focus on young adults given that household budgets tend to improve as people age, but fertility decisions are for many made relatively early on in adulthood.

2.5.1. Wages have increased, and were shared relatively evenly

The low number of births could be due to weak wage growth in the years since the financial crisis, and although it was the case in many OECD countries, it has not been a large problem in Norway. People in Norway have experienced real wage increases since 2009 that rank around the middle across OECD countries (Figure 2.12). Wage increases in Norway (12%) have not been as large as in some other northern European countries like Germany (15%) or Sweden (15%).

Figure 2.12. Wage growth has been middling, but positive overall, in Norway since 2009

Poor wage growth could still be a problem concentrated in some groups if wage growth had only occurred among well-paid, settled workers, but again this is not what the data show. Despite slight increases in wage inequality, the improved economic conditions since 2009 have been shared fairly equally in Norway in terms of earnings. The ratio of middle‑decile earnings to bottom-decile earnings has remained broadly stable, increasing marginally from 1.37 in 2009 to 1.43 in 2020. This increase is similar to that in Sweden (1.29 to 1.36). Looking at incomes after redistributive taxes and transfers have taken place, incomes are more equally distributed in Norway than in many other OECD countries, despite the slight increase in inequalities since 2009. The Gini coefficient (a measure of income inequality where 1 means perfect inequality and 0 means no inequality) of the net income of 18‑65 year‑olds in Norway was relatively low in 2020 (0.28), similar to that in Canada and Austria and lower than in the high-fertility country of France (Figure 2.13).

Figure 2.13. Incomes are shared relatively evenly across Norway

2.1.1. Housing costs can influence fertility

Active decisions to have children will likely involve questions whether the own living space, housing costs and neighbourhood are possible to combine with having children. More space is often needed to sufficiently accommodate additional family members, so the availability of suitable housing may influence childbearing intentions and behaviour (Kulu and Steele, 2016[28]). For instance, home ownership or long-term rentals provide additional housing security, which can increase likelihood of intending to have – or indeed to have – a(nother) child (Vignoli, Rinesi and Mussino, 2013[29]).

House prices might affect family formation and fertility through at least two different mechanisms. First, higher house prices may negatively influence birth rates among renters as a home purchase becomes less affordable. Second, owner-occupiers might see a wealth effect whereby they increasingly feel that they can afford a(nother) child (OECD, 2020[30]).

Fertility seems to be negatively associated with increasing housing prices, perhaps primarily among renters who are looking to buy a home. However, new evidence from the United Kingdom suggests that fertility rates among homeowners have declined between 1991 and 2016, and now resemble those of private renters, which have remained largely stable over the same period. This may be the result of the need to have dual incomes for couples to service mortgage debt under increasing house prices. Those that can afford homeownership may therefore have stronger preferences for careers rather than parenthood (Tocchioni et al., 2021[31]).

Although the effect of house price and rent price increases seem to vary by age, wealth, housing tenure, regional factors and other contextual circumstances (OECD, 2020[30]), some evidence shows that house price increases in particular can have effects on younger women and renters. For instance, studies using variations in house prices arising from planning restrictions in England and the United States find that higher house prices negatively influence the fertility rates among younger men and women (Aksoy, 2016[32]; Russell, 2018[33]), while OECD (2019[34]) holds some evidence on Korea. Government support for renters is also associated with a lower mean age at first birth, suggesting that more affordable rental housing may make it easier for younger couples to have children (Brauner-Otto, 2021[35]). Falls and/or delays in first births are of particular interest since they are pertinent to Norway’s fertility trends over the 2010s, so house and rent prices are important to consider.

2.5.2. High housing costs have raised the bar for starting a family

While there seems to be little cause for concern in terms of earnings and earnings inequality in Norway, increasing house prices and housing costs have put pressure on family budgets. Expenditure on housing is key when trying to understand the sustainability of household budgets since it tends to be the largest expense households face. It also tends to be relatively fixed, with little scope for making any savings if needed in a possible downturn.

Buying a home might be a priority for young couples aiming to start a family, but this has become more difficult over time. Real house prices have increased faster than incomes in both the OECD and in Norway, albeit slightly faster in Norway (OECD, 2022[36]). Figure 2.14 shows that house price to income ratios dropped sharply in 2008 and then increased back to pre‑financial crisis levels at a quicker rate than on average across the OECD. Since then, house price to income ratios in Norway have remained elevated and even increased slightly. Since the outbreak of the COVID‑19 pandemic in 2020, average increases in house price to income ratios across the OECD have almost caught up with those in Norway. In Q4 2021, house price to income ratios were 10% higher than in 2007 in Norway and 9% higher across the OECD (Figure 2.14).

Fast-rising house prices incentivise those who are planning to buy a home at some point to “get on the housing ladder” as soon as they can. With a strong norm to own a home, it can be stressful for young people to achieve this early life goal. An indication of this is that the average age of first-time buyers has decreased since the financial crisis in 2008‑09. When couples plan their financial future, it is possible that the expense of a home purchase is prioritised over the expense of having children. At the same time, fewer young adults are able to buy a home. Falls in ownership are most pronounced for those who work part-time, have low incomes and live in the largest cities (SSB, 2019[37]; Halvorsen and Lindquist, 2017[38]). It has become more important to have parents who are willing to help with a monetary gift or to act as a guarantor on the mortgage application become increasingly important. Intergenerational transfers have increased considerably in importance around 2009, with that average marginal effect of gifts from parents to children on home ownership increased from approximately 1 to 3 between 2009 and 2014 (Halvorsen and Lindquist, 2017[38]).

Figure 2.14. House prices have increased faster than incomes since the pre‑financial crisis peak

Those who end up not being able to buy a house have to resort to the rental market, but housing prices are elevated there as well (Figure 2.15). Given the increase in house prices and the strong desire of young people in Norway to move out of the parental home, it is unsurprising that the proportion of young people who live in rented accommodation has increased in recent years (Killengreen and Arnesen, 2021[39]; OECD, 2022[36]). Housing cost overburden rates are higher for tenants than for mortgagers and have increased. In 2010, 17% of private renters paid on more than 40% of their income in rent, compared to 3% of mortgagors. By 2012, this figure had increased to 24% for renters and by 2019 it was 23%, having peaked at 30% in 2015 (OECD, 2019[40]).

Norwegian renters in the bottom income quintile tend to spend more of their disposable income on housing costs (37%) compared to people in the middle income quintile in Norway and while this is higher than the OECD average (33%), households tend to spend more in Sweden (40%), Finland (39%) and Denmark (36%) (Figure 2.15). Overall, renting households with children tend to spend a slightly smaller share of their disposable income on housing costs than renters without children in Norway, as is also the case in the other Nordic countries (OECD, 2020[41]). More of the youngest people are also seeing high housing prices in Norway. One‑fifth (20%) of 15‑ to 29‑year‑olds in Norway were overburdened by housing costs in 2017, which can be compared to the smaller proportions in Sweden (15%) and Finland (13%). However, even more young face high housing costs in Denmark (28%) – which may be explained by a relatively high share of young people are living on their own (OECD, 2022[20]) - and Iceland (27%) (Figure 2.16).

To improve the efficiency and fairness of taxes on housing assets Norway could cut back on tax related concessions provided to homeowners and introduce capital gains tax from home sales and scrap special wealth tax discount rates for housing. Norway could enhance the performance of rental markets by, for example, removing the income‑tax concessions for owner-occupiers renting out parts of their primary residences or second dwellings. Norway could also focus on increasing the stock of social housing, especially in cities, for instance by increasing loans for construction. For a more detailed assessment of the Norwegian housing market, see OECD (2022[36]).

Figure 2.15. Housing costs are a heavier burden on lower-income groups

Figure 2.16. The young face relatively high housing costs in Norway

References

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[9] Ciganda, D., A. Lorenti and L. Dommermuth (2021), Changes in the educational gradient of fertility not driven by changes in preferences, Max Planck Institute for Demographic Research, https://doi.org/10.4054/MPIDR-WP-2021-016.

[5] Comolli, C. et al. (2021), “Beyond the Economic Gaze: Childbearing During and After Recessions in the Nordic Countries”, European Journal of Population 37, pp. 473-520, https://doi.org/10.1007/s10680-020-09570-0.

[17] Cools, S. and M. Strøm (2020), Ønsker om barn: en spørreundersøkelse om fertilitet, arbeidsliv og familiepolitikk, Institut for samfunnsforskning, https://samfunnsforskning.brage.unit.no/samfunnsforskning-xmlui/handle/11250/2645776.

[23] Dommermuth, L., J. Klobas and T. Lappegård (2015), “Realization of fertility intentions by different time frames”, Advances in Life Course Research, Vol. 24, https://doi.org/10.1016/j.alcr.2015.02.001.

[4] Dommermuth, L. and T. Lappegård (2017), Nedgangen i fruktbarheten fra 2010: Betydningen av utdanning, økonomisk aktivitet og økonomiske ressurser for førstefødsler og tredjefødsler, Statistics Norway, https://www.ssb.no/befolkning/artikler-og-publikasjoner/_attachment/307281?_ts=15be7159110.

[18] Dunson, D., D. Baird and B. Colombo (2004), “Increased infertility with age in men and women”, Obstetrics and Gynecology, Vol. 103/1, pp. 51-56, https://doi.org/10.1097/01.AOG.0000100153.24061.45.

[3] Ellingsæter, A. (2017), NOU 2017: 6 Offentlig støtte til barnefamiliene, Barne- og likestillingsdepartementet, https://www.regjeringen.no/no/dokumenter/nou-2017-6/id2540981/.

[1] Ellingsæter, A. (2012), “Barn i politikkens sentrum: pronatalisme på norsk”, Nytt Norsk Tidsskrift, Vol. 29/4, pp. 361-371, https://doi.org/10.18261/ISSN1504-3053-2012-04-03.

[16] Fernandes, A. et al. (2020), “Clinicians’ Perceptions of Norwegian Women’s Experiences of Infertility Diseases”, International journal of environmental research and public health, Vol. 17/3, https://doi.org/10.3390/ijer.

[22] GGS (2020), Generations and Gender Survey 2020 Norway Wave 1, https://ggp.colectica.org/item/int.example/e101b705-934c-4dd0-8f09-d2d8b979c311/26.

[38] Halvorsen, E. and K. Lindquist (2017), “Getting a foot on the housing ladder: The role of parents in giving a leg-up”, Norges Bank Research 19, https://www.norges-bank.no/en/news-events/news-publications/Papers/Working-Papers/2017/192017/.

[15] Hellstrand, J. et al. (2021), “Not just later, but fewer: Novel trends in cohort fertility in the Nordic countries”, Demography, Vol. 58/4, pp. 1373-1399, https://doi.org/10.1215/00703370-9373618.

[21] Hellstrand, J., J. Nisén and M. Myrskylä (2022), “Less Partnering, Less Children, or Both? Analysis of the Drivers of First Birth Decline in Finland Since 2010”, European Journal of Population, Vol. 38, pp. 191-221, https://doi.org/10.1007/s10680-022-09605-8.

[14] Human Fertility Database (2015), Methods Protocol, https://www.humanfertility.org/cgi-bin/explan.php#age.

[24] Jensen, A. (2016), “Ideas about childbearing among childless men”, Families, Relationships and Societies, Vol. 5/2, pp. 193–207, https://doi.org/10.1332/204674315X14431715144571.

[39] Killengreen, M. and P. Arnesen (2021), “Andelen leietakere øker”, SSB, https://www.ssb.no/bygg-bolig-og-eiendom/artikler-og-publikasjoner/andelen-leietakere-oker.

[26] Kitterød, R. and H. Lidén (2020), “Children in dual-residence arrangements: Exploring discourses of fairness and children’s best interest in Norway”, Children and Society, Vol. 35/4, pp. 549-562, https://doi.org/10.1111/chso.12424.

[28] Kulu, H. and F. Steele (2016), “Interrelationships between childbearing and housing transitions in the family life course”, Demography, Vol. 50/5, pp. 1687-1714, https://doi.org/10.1007/s13524-013-0216-2.

[11] Lappegård, T. et al. (2022), Understanding the positive effects of the COVID-19 pandemic on women’s fertility in Norway, Statistics Norway, Research Department, https://www.ssb.no/en/befolkning/fodte-og-dode/artikler/understanding-the-positive-effects-of-the-covid-19-pandemic-on-womens-fertility-in-norway.

[27] Lappegård, T. and T. Noack (2015), “The link between parenthood and partnership in contemporary Norway - Findings from focus group research”, Demographic Research, Vol. 32/9, pp. 287-310, https://doi.org/10.4054/DemRes.2015.32.9.

[13] Neyer, G. et al. (2022), “Fertility Decline, Fertility Reversal and Changing Childbearing Considerations in Sweden: A turn to subjective imaginations?”, Stockholm Research Reports in Demography, Vol. 08, https://doi.org/10.17045/sthlmuni.19698442.v2.

[20] OECD (2022), Affordable housing database, https://www.oecd.org/housing/data/affordable-housing-database/housing-market.htm.

[7] OECD (2022), Family Database, https://www.oecd.org/els/family/database.htm.

[2] OECD (2022), Health Status: Life Expactancy, OECD, https://stats.oecd.org/.

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[30] OECD (2020), Policy Actions for Affordable Housing in Latvia, OECD Publishing, https://issuu.com/oecd.publishing/docs/latvia_housing_report_web-1.

[40] OECD (2019), Affordable Housing Database: indicator HC1.2 Housing costs over income, https://www.oecd.org/housing/data/affordable-housing-database/housing-conditions.htm.

[34] OECD (2019), Rejuvenating Korea: Policies for a Changing Society, Gender Equality at Work, OECD Publishing, Paris, https://doi.org/10.1787/c5eed747-en.

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[29] Vignoli, D., F. Rinesi and E. Mussino (2013), “A home to plan the first child? Fertility intentions and housing conditions in Italy”, Population, Space and Place, Vol. 19/1, pp. 60-71, https://doi.org/10.1002/psp.1716.

Note

← 1. This report takes a heteronormative approach to childbearing and childrearing. While society in Norway and elsewhere is changing, with different children growing up in families of different gender constellations, the number of couples that will have been affected by such developments during the past decade is still small. The OECD is looking forward to following developments in fertility and the LGBT+ community, especially if more data becomes available so that one can follow such developments in detail.

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