The Total Fertility Rate (TFR) has halved from 3.3 children per woman in 1960, on average across the OECD, to 1.5 in 2022, below the “replacement level” of 2.1 children per woman. This decline will change the face of societies, communities and families and will potentially have a significant impact on economic growth and prosperity.

Key findings:

• Fertility rates are down as women are having children later or not at all
  
• Challenges faced by young people could be holding back potential parenting plans
  
• Fertility rises when women can combine work and family life
  

Discover what policy makers can do.

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The long-term decline in the TFR taking place since the 1960s, stopped temporarily during the 2000s, but resumed again after the great financial crisis of 2007-08. By 2022, the TFR was only 1.5 children per woman on average in the OECD, with 1.2 children per woman in Italy and Spain – and it was the lowest in Korea, with an estimated 0.7 children per woman in 2023.

Births increasingly occur at later ages, with an average age of 30.9 in 2022, compared to 28.6 in 2000. At the same time childlessness was rising, and around one in four women born in the 1975 cohort in Italy and Spain was permanently childless. In Japan it was 28%. The share of third born (or higher order) children is around 20% of all births but subject to large variation across countries.

Personal choices on having a child depend on a wide range of factors, such as, economic and financial security, the costs of raising children, social norms, personal and medical conditions, labour market conditions and the family policy environment. Over the past decades, many of these factors have changed. Young people find it more difficult to become financially independent and establish themselves in labour and housing markets: increased housing costs are found to have a negative effect on TFRs.

A succession of global crises (e.g. COVID-19, climate issues concerns, the cost-of-living crisis) has increased (economic) insecurities among younger people, which complicates their transition into parenthood. Young people increasingly find meaning in life outside of parenthood, and there appears to be increased acceptance of not having children.

If women are able to combine work and family life, and participate in economic life on an equal footing, this leads to better economic outcomes and higher fertility rates. More options to combine work and family commitments and greater societal emphasis on gender equality have contributed to changing gender roles in families and dual-earner households. Paid parental leave, affordable quality childcare, all help men and women be in employment, all have a positive effect on fertility rates. Financial support towards families, especially when linked to housing, is increasingly important.

The best approach for countries that are concerned about fertility rates remains to promote more gender equality and fairer sharing of work and childrearing. This involves providing paid parental leave, childcare and financial supports, but policy must also have a greater focus on the costs of children, especially housing costs.

Consider how to change policy to adapt to a “lower-fertility future” as societies are ageing and deaths may well exceed births in the next decade. Population ageing will result in stronger fiscal pressures as government expenditures (including on pensions, health services and services for the elderly) increase along with potentially decreasing public revenues with shrinking working-age populations. Such a policy could involve immigration, supporting longer working lives, bringing more under-represented groups into the labour force, e.g. youth and women, and taking measures to enhance their productivity.