Opinion & Commentary
Babies: blight or blessing?
Australia’s birth rates and faltering fertility are in the news again. Cardinal Pell has made a powerful statement about the implications of birth rates below the population replacement level of 2.1 births per woman for both Australia and Western nations in general. Some environmentalists, on the other hand, deplore the possibility of higher birth rates leading to environmental devastation.
But what do young adults think about having children?
A large-scale survey of men and women aged between 20 and 39 by the Australian Institute of Family Studies in 2004 indicated that, on average, they thought the ideal number was 2.5 children per family - well above our present rate. Why, then, is this ideal not pursued in practice?
Cardinal Pell speaks of ‘ruthless commercial forces’ as a key problem. If he is pointing to policies focused on getting mothers back into the industrial and commercial workforce as soon as possible by subsidising infant day care and post-partum leave, against natural inclinations to stay longer with their children, or to have more children, he may have a point.
Nevertheless, the reality is that the majority of women interrupt working lives if they have children and, for a great many, this has its price in surrendering what they enjoy and in losing the money and independence they earn. Children are thus doubly costly. They represent not only the costs of rearing them but also salaries and other satisfactions given up. In other words, the problem of the ‘work-family balance’ that now preoccupies us.
Awareness of such costs must also play a part in later marriage, later childbirth, and fewer children than most men and women would like to have. Young couples, like the rest of us, like to maintain a way of life that conforms with their socio-economic status and aspirations. Insofar as child costs seriously threaten that way of life, they are reluctant to have them.
In 1960, at the peak of post-war prosperity, the birth rate was 3.5 children per woman. Following the recession beginning in 1961, it began a relentless decline to 1.73 per woman by 2001. Then something strange began to happen. It started to go up, and by 2006 had risen to 1.81 children per woman.
Some have suggested that this upward blip is due to the Costello ‘baby bonus’. This has some plausibility. Economists have for years argued the importance of the costs of children in determining birth rates and there are reasons why this may be the direction in which to look. It is worth noting that the baby bonus, unlike family child benefits A and B, was not means-tested. Putting the bonus and the benefits together meant that Australia’s child benefits and allowances were above the OECD average. But wait, there’s more.
The upward blip followed the Howard prosperity surge. Between the late1990s and 2006 disposable income per capita and real net worth per capita rose very steeply and quickly compared to previous years and in tune with the rising birth rate. So, not only were child benefits more generous, disposable incomes were also increasing rapidly. The relative costs of children were falling and it was easier to contemplate having children whilst maintaining a preferred way of life. And there is another interesting phenomenon associated with what was happening.
The Australian Bureau of Statistics measures the distribution of socio-economic advantage and disadvantage throughout the whole community by dividing it into ‘quintiles’ or fifths. The lowest or most disadvantaged quintile normally has the highest fertility rate and the highest, most advantaged quintile, the lowest; presumably because the most advantaged quintile has higher aspirations for its children, invests more in them and therefore has fewer.
Over recent years this pattern has reversed. The increase in fertility in the bottom quintile was only one per cent compared to a ten per cent increase in the top quintile. It could be that a relatively greater increase in higher incomes and the non-means-tested baby bonus for the top quintile explain the reversal.
We cannot be absolutely sure that the rise in fertility will be sustained, let alone increased further. The outlook for continued prosperity is bleaker and, although the baby bonus is to be increased, it will be means-tested. Unemployment rates may rise, and the costs of dealing with climate change will ultimately fall upon every Australian individual. Also, non-economic factors in fertility, such as the stability or otherwise of marriage, play a part that is hard to assess. Yet it seems fair to conclude that reducing the costs of children is a vital factor in sustaining a fertility rate that approaches what young couples aspire to.
Barry Maley is senior fellow at the Centre for Independent Studies and has published extensively on family matters.
