Fertility Policy Works
Debate Presentation. IUSSP Conference
Tours, July 2005
A happy father of sextuplets?
No, it is …
• Peter Costello, the Australian Treasurer and
would-be future Prime Minister.
Australia is not alone
• Like Australia, the governments of Austria,
Singapore and the Republic of Korea have
recently introduced massive reforms to support
those who have children.
• After policy change in Austria in 2002, fertility
rose from 1.36 to 1.44 in 2004.
• Believers are popping up everywhere. As far as
many policy makers are concerned, this evening’s
debate is passe.
Why is the policy direction
• Because it has to change.
• Very low fertility does not go away of its
own accord. Indeed, without effective
action, it consolidates.
Goldstein, J., Lutz, W. and Testa, M. 2003. ‘The emergence of sub -replacement
family size ideals in Europe’, Population Research and Policy Review, 22 (5-6):
479 – 496.
Total Fertility Rates 2003
Group 1 Countries TFR Group 2 Countries TFR
United States (2002) 2.01 Portugal 1.44
Iceland 1.99 Switzerland 1.41
Ireland 1.98 Malta 1.41
New Zealand 1.96 Austria 1.39
France 1.89 Germany 1.34
Norway 1.80 Spain 1.29
Denmark 1.76 Italy 1.29
Finland 1.76 Japan 1.29
Australia 1.75 Greece 1.27
Netherlands 1.75 Singapore 1.26
Sweden 1.71 Taiwan 1.24
United Kingdom 1.71 Republic of Korea 1.19
Luxembourg 1.63 Hong Kong SAR 0.94
Canada (2002) 1.50
The cultural divide
• Group 1 Group 2
• Nordic • Southern Europe
• Western Europe • Western Europe
speaking) • East Asia
Central and Eastern European countries constitute a third group where fertility
rates are very low in a context of high unemployment, poor economic conditions
and abolition of family support policies.
• Hungary 1965
• The ‘strong’ conclusion was that the new policies stopped
the fall in fertility in Hungary that was underway at that
Andorka, R. and Vukovich, G. 1986. ‘The impact of population policy on fertility in Hungary, 1960-1980’,
Papers of the International Population Conference, Florence 1985, Volume 3. Liege: International Union for
the Scientific Study of Population, 403-412.
• German Democratic Republic 1976
• An explicitly pronatalist policy package introduced by the
German Democratic Republic in 1976 increased fertility in
the GDR in the years from 1977 to 1987 by between 15
and 20 per cent.
Buttner, T. and Lutz, W. 1990. ‘Estimating fertility responses to policy measures in the German Demographic
Republic’, Population and Development Review, 16(3); 539-555.
Sweden’s Fertility Fluctuations
• Sweden’s fertility fluctuations over the past 20
years cannot be explained sensibly without
examining the effects of policy changes.
• Whether the direction was up or down, policy was
an essential part of the process.
• Hoem, J. 2005. ‘Why does Sweden have such high fertility?’, A presentation to the annual meeting of
the Deutsche Gesellschaft fur Demographie, Potsdam, 16 March.
Laroque and Salanie 2005
• ‘Our results suggest that financial
incentives play a sizable role in
determining fertility decisions in France’.
Laroque, G. and Salanie, B. 2005. ‘Does fertility respond to financial incentives’,
CEPR Discussion papers 5007, CEPR.
• Early days, but births increased by 6.5% in
2004 following the introduction of a
generous new maternity allowance.
The Rand Corporation 2004
• Re France ‘Family policy has been high on the
political agenda ever since (the introduction of the
Family Code in 1939), resulting in relatively high
• More generally ‘government policies can have an
impact on fertility’.
Grant, J., Hoorens, S., Sivadasan, S. van het Loo, M., DeVanzo, J., Hale, L., Gibson, S. and
Butz, W. 2004. Low Fertility and Population Ageing: Causes, Consequences, and Policy Options,
RAND: Santa Monica.
• Re 18 European nations: 'a very substantial,
significant positive effect (on fertility) of the
national mean child benefit level after controlling
for other conflating factors’.
Adkins, D. 2003. ‘The role of institutional context in European regional fertility patterns’,
Paper presented to the 2003 Annual Meeting of the Population Association of America, Boston,
• There are ‘strong positive effects on fertility from
higher child care availability … What is required
is coherent application of a range of well-designed
interventions, applied consistently over time’ (p5).
• Sleebos, J. 2003. Low Fertility Rates in OECD Countries: Facts and Policy Responses, OECD
Social, Employment and Migration Working Papers, 15, Paris: OECD
• ‘Countries which regard their family policies as
part of labor market policies, of care policies, and
of gender policies seem to have fared better in
retaining fertility above lowest low levels’ (p32).
• Neyer, G. 2003. ‘Family policies and low fertility in Western Europe’, MPIDR Working Paper,
WP 2003-021, July, Max Planck Institute for Demographic Research, Rostock.
• ‘There appears indeed to be a positive – albeit
very small – impact of cash benefits on fertility’.
• ‘The literature also suggests that policies that
support working parents can have an effect on
Gauthier, A. 2004. ‘Choices, opportunities and constraints on partnership, childbearing and
parenting: the policy responses’, Background paper for the European Population Forum 2004:
Population Challenges and Policy Responses.
Impacts take time
• Pronatalist policies are likely to be implemented
by governments when fertility rates are low.
Accordingly, in the early years of implementation
of a policy, a substantial policy initiative may be
associated with low fertility. Most studies do not
take this into account.
Castles. F. 2003. ‘The World Turned Upside Down: Below Replacement Fertility,
Changing Preferences and Family-Friendly Public Policy in 21 OECD Countries’,
Journal of European Social Policy, 13(3): 209-227.
Only a small impact is required
• In combination with a small tempo adjustment, an
increase of 0.3 in TFR would lift all countries into
the safety zone of low fertility.
• Hence, an impact at the margin is all that is
required – but it won’t happen without policy.
Remember the 1960s
• In the 1960s, the majority of demographers were
skeptical about the chances that policy could
reduce fertility in developing countries.
• Now, we can look back on the incredible success
of these policies.
• Today we hear the same skepticism in relation to
raising fertility from very low levels.
• In the not-too-distant future, I am confident we
shall be able to look back on the success of
policies designed to raise fertility. 19
My granddaughter, Matilda. A great investment for Australia.