Dwindling Fertility Rates Jeopardize Future Prosperity in OECD Nations

Thursday 20 June 2024 - 15:25

A new report by the Organization for Economic Co-operation and Development (OECD) has highlighted the alarming decline in fertility rates across its member countries. This trend poses a significant risk of demographic decline, which could lead to severe economic and social challenges for future generations. The report, titled "Society at a Glance," presents striking statistics that underscore the urgency of addressing this critical issue.

According to the report, the average fertility rate in OECD countries has dropped from 3.3 children per woman in 1960 to just 1.5 in 2022. This figure is well below the replacement level of 2.1 children per woman, necessary to maintain a stable population in the absence of migration. The Paris-based international organization notes that this finding has far-reaching implications for the demographic landscape and economic prosperity of these nations.

The report highlights particularly concerning situations in Italy and Spain, where the total fertility rate is only 1.2 children per woman in 2022. Alarmingly, South Korea currently holds the lowest fertility rate among OECD nations, with an estimated 0.7 children per woman in 2023.

This sustained decline in fertility rates could trigger a demographic decline as early as the next decade, with deaths outnumbering births for the first time in at least half a century. Additionally, the number of individuals aged 65 and above per 100 people of working age is projected to double, increasing from 30 in 2020 to 59 in 2060 across the OECD area.

The ensuing contraction of the working-age population could precipitate an aging crisis, straining public resources and posing formidable social and economic challenges. This is particularly true for funding retirement pensions and healthcare services.

Another major trend highlighted in the "Society at a Glance" report is the rising average age of mothers at childbirth, which has increased from 28.6 years in 2000 to 30.9 years in 2022. A comparative analysis of women born in 1935 and 1975 reveals that childlessness has nearly doubled in Spain, Estonia, Italy, Japan, Lithuania, Poland, and Portugal.

The OECD notes that the decision to have children is influenced by various factors, including economic and social pressures associated with parental responsibilities, as well as societal shifts, such as the diminishing stigma surrounding childlessness. The organization emphasizes the need for multidimensional approaches to promote childbirth.

"While OECD countries have introduced a range of measures to support families, the economic cost and long-term financial uncertainty associated with having children continue to significantly influence the decision to become a parent," stated Stefano Scarpetta, Director of the OECD's Employment, Labour and Social Affairs Directorate.

Scarpetta further emphasized the need for comprehensive and reliable support for families. This includes affordable housing, family-friendly policies that facilitate work-life balance, and alignment with other public policies that promote access to quality employment and career advancement opportunities for women.

The report also highlights the mounting challenges posed by rising housing costs since the mid-2010s, which compound the difficulties in establishing lasting relationships and starting families. Many individuals in their 20s and 30s are forced to reside with their parents for financial reasons, hindering their ability to form independent households and start families. Ensuring access to affordable housing could alleviate this barrier and facilitate family formation among younger generations.

With fertility rates projected to remain low, the OECD urges countries to adapt their strategies for the future. "This includes taking a proactive approach to immigration and integration, facilitating employment among underrepresented groups, and boosting productivity to mitigate the potential economic and fiscal consequences of a declining workforce," the report states.

As nations grapple with the profound implications of this demographic shift, concerted efforts encompassing policy reforms, societal support, and economic initiatives will be crucial to address the challenges posed by dwindling fertility rates and to secure a prosperous future for generations to come.