"Few of us, and even fewer of you." What policies for increasing birth rates really work?

“Few of us, and even fewer of you.” What policies for increasing birth rates really work?

Photo: ua.depositphotos.com / molka
6 November 2023
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Over the past fifty years, the birth rate in developed countries has been steadily decreasing. Governments are spending significant resources on developing and implementing policies to slow down this process. However, the effectiveness of such measures is a subject of debate, as the decision to have children or not is influenced by a multitude of factors, from economic conditions to established social and cultural norms. Nevertheless, research has identified a relatively successful set of policies to encourage families to have more children. Let’s explore what they entail and what experience Ukraine can draw from them.

Why is the birth rate decreasing?

Researchers explain demographic changes using the concept of demographic transition (F. Notestein, 1945), which includes several stages. The first stage, which the world went through at the beginning of the 20th century, was characterized by a sharp decline in mortality while maintaining a high level of birth rates. Problems began to arise in the second stage of demographic transition, which researchers date to the late 1960s and early 1970s (R Lesthaeghe, D van de Kaa): the mortality rate exceeded the birth rate, as the birth rate in the world fell by one and a half times, and the number of large families rapidly decreased.

Among the main reasons for the decline in birth rates a change in lifestyle is often cited. Having children is becoming more “costly” in terms of time – many people prefer to invest their time in self-development rather than child-rearing. Instead of having many offspring, which would likely require economizing on their upbringing, parents opt to have one or two children but provide them with a “higher quality” upbringing and better opportunities. Thanks to the widespread availability of safe and effective contraception, women can delay marriage and childbirth to pursue higher education and dedicate time to their careers.

The decline in birth rates is also closely linked to the fear among women of potentially “falling behind” in the labor market and societal life while they care for their children. These concerns are grounded in research showing that women raising children tend to earn less than those without children. This concept has been termed the “motherhood penalty” (M.J. Budig, P. England, 2001). According to various estimates (O. Y. Nizalova, T. Sliusarenko, S. Shpak, 2016), as of 2012, the motherhood penalty was nearly zero in Finland, Sweden, Belgium, and Israel; 5-10% in France, Canada, the United Kingdom, Poland, Slovakia, and the Czech Republic; 10-15% in the United States and Hungary; and the highest, 20-33%, in most continental European countries and Ireland.

According to data from the World Bank as of 2021, the total fertility rate (TFR), which is the average number of children a woman can be expected to give birth to during her reproductive years, is 2.3 worldwide. The highest TFR is found in African countries like Nigeria (7 children), Somalia, and Chad (6 children), among others. The lowest TFR is observed in Asian countries such as Hong Kong and South Korea, where it is less than 1.

Figure 1. Countries of the world by the overall birth rate

Data: World Bank

At the same time, the replacement level fertility rate is typically considered to be around 2.1 children per woman. When the fertility rate falls below this level, it indicates depopulation, i.e., a declining population.

Demographic Issues in Ukraine

The TFR in Ukraine, at 1.2 children, is the lowest in Europe and one of the lowest in the world. For comparison, neighboring Moldova and Romania have a TFR of 1.8, Hungary and Slovakia have 1.6, and even hostile Russia and Belarus have a TFR of 1.5. The closest to Ukraine is Poland, where the TFR stands at 1.3.

Figure 2. Changes in the total fertility rate in Ukraine, Europe, and the world

Data: World Bank

Figure 2 shows that changes in the birth rate in Ukraine resembled those in Europe, but the declines were deeper.

During the war, the situation has become even worse. According to the IMF's data as of April 2023, Ukraine's population is slightly over 33 million people, whereas in 2021, the population of Ukraine was over 41 million. However, these figures do not account for the population in the territories temporarily occupied by Russia, so the population may increase somewhat after the liberation.

Although Ukrainian official sources do not disclose the exact number of casualties since the start of the full-scale war, according to the United Nations as of September 26, 2023, Russians have killed 9,701 civilians, including 555 children. However, the true extent of Russian crimes against the Ukrainian people could be significantly higher since gathering precise data from the occupied territories is challenging and sometimes impossible. For instance, various estimates suggest that in Mariupol alone, anywhere from 22,000 to 100,000 civilians may have lost their lives during the occupation. The number of military casualties is not disclosed for security reasons. Another factor is forced migration. According to various estimates, between 4.7 and 5.8  million Ukrainian refugees are living abroad. According to CES data, approximately half of these refugees are children, and roughly one-third are women. In the worst-case scenario, two-thirds of these refugees may not return to Ukraine.

Therefore, sustaining the population at the current level is already a critical issue for Ukraine. In an ideal (and likely impossible) scenario, on average, every Ukrainian woman after the war would need to give birth to at least two children just to maintain generational replacement. On average, a Ukrainian family would need to raise three children to compensate for the number of casualties and those who have left Ukraine. 

What policies to support birth rates are implemented by European countries?

Population decline is occurring in most European countries, and in the long run, it could have negative consequences for the economy. Increasing life expectancy leads to a reduction in the proportion of young, working-age, and economically active populations, resulting in a decrease in the pace of economic development and innovation. Another negative consequence could be the potential collapse of the social welfare system, a labor force shortage, and a reduction in domestic demand.

Western countries are turning to migrants to address these issues. However, in the long-term perspective, when migrants reach retirement age, they too will become a burden on the pension system.

Convincing people to have more children is a challenging task for governments in various countries. Since the late 1960s, countries have been developing and testing various policies to support families and encourage them to have more children. However, research shows that only a small fraction of such policies can effectively counteract declining birth rates. Let's see which ones. 

According to research by the United Nations Population Fund, the most effective measure has been ensuring access to affordable, high-quality childcare services, such as kindergartens.

Effective measures also include implementing a gender-equal approach to parental leave policies. The most common models for parental leave are as follows: the father receives a fixed number of paid days off and is required to use them; otherwise, the family gets reduced payments (this model is in place in Sweden). Alternatively, the mother and father can decide how to divide the paid leave days at their discretion (this model is used in most EU countries). While the division of responsibilities allows women more time for rest, learning, or advancing their careers, the positive impact on birth rates is realized primarily when the leave is well-compensated, providing the family with income close to what they would earn during full-time employment.

Important measures to ensure inclusion and eliminate gender discrimination in the workplace include incentives for employers who implement support measures for pregnant women and mothers of infants, as well as penalties for discrimination against them. Employer support measures can include allowing remote work or flexible schedules, providing medical services for mothers in their insurance (or separate insurance), and more. At the same time, discrimination can be considered when a pregnant woman is pushed toward termination instead of granting her maternity leave or when a job applicant is denied employment based on her pregnancy or having young children, which the employer uses as grounds for rejection.

Monetary incentives have the smallest and shortest-term impact on birth rates. If significant sums of money are offered upon the birth of a child, birth rates may increase for a certain period (up to several years), but this effect tends to diminish over time. However, many countries worldwide (such as the United States, the United Kingdom, and New Zealand) use such programs to slow down population decline, possibly because discontinuing such a program could negatively affect the government's popularity. 

In practice, countries typically implement a combination of measures, including expanding childcare services, providing monetary incentives, and offering paid parental leave. Moreover, developed countries often allocate significant financial resources to support such policies. According to the United Nations, these expenditures can reach up to 4% of GDP, while countries in the Organisation for Economic Co-operation and Development (OECD), encompassing around thirty countries, including most EU nations, typically allocate approximately 2.3% of GDP on these measures (see Figure 3).

Figure 3. OECD countries' spending on family benefits in 2019 as a percentage of GDP

Data: ОЕСD report for 2019, OECD Family Database

Let's consider a few examples of countries implementing policies to increase birth rates and their consequences.

France has the highest TFR in the European Union at 1.8. Their family support policies are comprehensive and substantial, with France allocating up to 3.5% of GDP annually to these programs. Before joining the EU, their conservative pro-natal policies encouraged women to "stay at home" to care for children. However, starting in the 2000s, France introduced a comprehensive set of measures to boost birth rates, primarily focused on increasing family well-being, preserving women's access to the labor market, and achieving gender equality. Families can access various childcare services, from municipal childcare centers and nurseries (where children can be enrolled as early as two months old) to hourly services provided by social workers. Financial assistance is mainly available to larger or low-income families. Additionally, families can benefit from tax breaks that increase with each additional child. 

Figure 4. Changes in the total fertility rate in France before and after the activation of pro-natalist policies

Data: World Bank

As can be seen in Figure 4, birth rates in France, while decreasing, are still the highest among all European countries. 

In the Scandinavian countries of Sweden and Norway, fluctuations in birth rates are more associated with economic cycles. However, even in these countries, the TFR remains relatively high at 1.7 and 1.6, respectively. In 2019, these countries allocated more than 3% of their GDP to family support policies.

For Norway, the key to success in boosting birth rates has been the expansion of the childcare network since the early 1970s, as well as generous cash benefits (up to $5,000 per month), which are close to the average monthly salary, provided for 18-22 weeks (4-5 months, depending on health conditions).

In Sweden, between 1983 and 1990, they managed to increase the TFR from 1.6 to 2.1. This was achieved through the paid parental leave policy (the so-called "speed premium"). During this leave, the cash benefits depended on the parents' incomes before the birth of the child (covering about 80% of the mother's salary). If a woman gave birth to a second child within the following two years, the payment remained the same. This worked because after giving birth to a child, many women in Sweden returned not to full-time but to part-time employment. They began to receive lower income, so without such a policy, payments for the second child would have been lower. However, some researchers note that Sweden's fertility policy was pro-cyclical (as seen in Figure 5) because payments tied to previous incomes contributed to increased fertility during periods of economic growth and decreased it during times of economic instability (if the labor market worsens, women tend to postpone childbirth until "better times").

Furthermore, Sweden was one of the first countries to introduce parental leave for fathers. This policy has been in place in the country since 1974.

Figure 5. Changes in the average fertility rate in Sweden

Data: World Bank

Substantial spending on family incentive programs has not yielded the desired results in Poland, which allocates approximately 3.5% of its GDP to family support measures. In this country, a mother can receive up to 32 weeks of paid parental leave, covering 60-100% of her previous income. Additional benefits include payments of 95-135 Polish zlotys (UAH 827-1175) for each child until they reach 24 years of age, tax-exempt monthly assistance of 500 zlotys (UAH 4,355) for each child up to 18 years old, as well as 95 zlotys per month for each third and subsequent child. After introducing the 500 zloty payment program in 2016, the TFR increased only slightly (by 0.1) and has been declining since 2017. This indicates that child-related payments do not stimulate birth rates, unlike policies aimed at facilitating the combination of motherhood and career. An expected "side effect" of such a policy has been the reluctance of Polish mothers to return to the labor market, as they prefer social payments.

Policies aimed at increasing birth rates have not yielded positive results in Singapore either. Despite the government implementing a wide range of measures, including paid leave, subsidies, tax incentives, discounts, one-time payments, and benefits for companies offering flexible schedules, the TFR decreased by nearly 20% from 2001 to 2018, reaching a rate of 1.2. This occurred because policymakers did not take into account local nuances: the average age of giving birth to the first child in Singapore is significantly higher than in many other countries, and due to the pervasive "success culture," young people in Singapore are more inclined toward building successful careers and self-development rather than starting families and having children. Promoting broad access to reproductive technologies, including a 70% state compensation for the cost of artificial insemination, did not have the desired effect either.

The policies implemented by Ukraine

The most common form of assistance that families can rely on when a child is born is social payments and compensation.

The State Budget of Ukraine for 2023 includes a program called "Social Protection of Children and Families" with funding of UAH 26.9 billion. This program is the source of funding for most social assistance related to the birth of a child, including the following: 

Additionally, the state budget for 2023 includes programs for rehabilitating children in summer camps (with a total amount of approximately UAH 446.5 million) and a program to support low-income families (with a total expenditure of nearly UAH 53.5 billion). Under the latter program, these families may be eligible to receive housing subsidies and other benefits. 

Overall, in 2023, the state allocated nearly UAH 80.8 billion to support Ukrainian families. This is approximately 1.5% of Ukraine's GDP for 2022 and about 3.5% of the total expenditures in the state budget for 2023.

According to the law, a woman can take paid maternity leave at any time from the thirtieth week of pregnancy in Ukraine. Under normal circumstances, this leave can last for 126 days (140 days in the case of complicated childbirth or the birth of two or more children and 56 days in the case of adopting a newborn from a maternity hospital). The payment amount depends on the woman's average annual income before taking childcare leave. It is approximately equal to her income for the same number of days in the previous year.

Receiving assistance in connection with the birth of a child has been significantly simplified in recent years in Ukraine. The Ministry of Digital Transformation launched the "eBaby" service, which allows parents to register the birth of a child and access social services online.

In Ukraine, there are also programs for preferential lending to young families through the "State Youth Housing" program. Although preferential mortgages are not yet widespread, and budget financing for them was not allocated during the war, 137 young families used them in the first six months of 2023 (15 loans were financed from local budgets, and 122 from the State Youth Housing statutory capital).

In 2021, the government took a step toward European practices in parental leave. The Verkhovna Rada adopted a law allowing the father of a child (or the husband of a woman who has given birth), a grandfather, or a grandmother to take paid parental leave for 14 days. While fathers can now dedicate more time to childcare, the duration of this leave is much shorter than in European countries, and the law does not obligate fathers to use this leave but merely grants them the right. Therefore, this law alone may not be sufficient to reduce the burden on mothers and enable parents to effectively share childcare responsibilities.

What else can Ukraine do to increase birth rates?

Given that Ukraine is currently experiencing a full-scale war, national defense remains a top priority for budget allocation (defense spending is expected to reach 21% of Ukraine's GDP for the next year). Therefore, the financial resources that Ukraine can allocate to programs supporting childbirth are significantly limited compared to those available to wealthier countries. In these circumstances, the government should evaluate existing family support policies and choose those that will be most effective in promoting childbirth.

Direct cash payments should be reserved primarily for supporting the least privileged or large families. It is better to allocate more funds to the development of childcare services. These could be programs at the state or municipal level that provide compensation to parents for the services of social workers or private daycare centers, as well as support for the construction of daycare centers by local authorities (e.g., co-financing). In addition, the state should continue implementing legislation promoting gender equality in childcare. Although fathers currently have the right to take paternity leave, we believe that 14 paid days are too short a period, which effectively does not allow women to take a break from their maternal duties and allocate time to their own needs. A model for Ukraine could be Sweden, where fathers are obliged to take 60 paid days for childcare out of 480 available, or the model of other European countries, where both fathers and mothers can decide how to divide the days of such leave according to their preferences.

After the war, the government should focus its efforts and resources on rebuilding a network of high-quality and affordable childcare centers. Currently, the infrastructure for childcare services is deteriorating. According to the State Statistics Service, the number of childcare centers has decreased by one and a half times since 1990, and the overall coverage of children is only 53%, while the average in Europe is 82.5%. It is important to emphasize that this is a crucial component of a comprehensive set of measures to support families, as accessible and high-quality childcare services have the most positive impact on families' desire to have more children.

Some measures do not require significant financial investments but rather involve changing society's perception of domestic responsibilities, including childcare, as valuable work. Therefore, it is essential to continue policies promoting gender equality and take action to combat discrimination and domestic violence. Parents need to understand that there are no threats to them or their children during family planning. Although Ukrainian society exhibits signs of reproductive pressure, including various demands on women to have children quickly or have more children, it is crucial to understand that the results of such behavior can be counterproductive, as these pressures can worsen women's psychological well-being (e.g., leading to postpartum depression).

Another issue that needs to be addressed before the end of the full-scale war is improving the quality of healthcare and ensuring access to it. Unfortunately, Ukraine ranks first among European countries in terms of the number of maternal deaths during childbirth. According to the World Health Organization's data as of 2020, there were 17 such cases per 100,000 live births. Ukrainian women also still face obstetric violence, which includes actions by healthcare workers to which they did not consent, withholding full and truthful information about the consequences of medical interventions, emotional pressure, disrespect during the provision of medical services, and more. Due to these factors, women may be afraid to give birth to even their first child, and if the first pregnancy experience was traumatic, a woman may simply refuse to have a second child.

Conclusions

Since the late 1960s, countries worldwide have been experiencing a decline in birth rates. In order to prevent depopulation and encourage families to have more children, wealthy countries are implementing a range of measures and allocating significant funding for them (up to 4% of GDP among affluent nations). Effective policies allowing women to combine motherhood with a career include the development of quality and accessible childcare services for full-time and part-time care, involving fathers in the childcare process through paid leave, and from employers, ensuring workplace inclusion, the ability to work remotely, or with flexible schedules.

The demographic situation in Ukraine is worse than anywhere in Europe. The onset of the full-scale war forced millions of people, predominantly women with children, to flee to neighboring countries, and Russian crimes during the conflict have resulted in the deaths of thousands of civilians and military service members.

The minimum program that the government can implement before the end of the war is to increase access to quality medical services for pregnant women and parents of infants, take measures to ensure gender equality, and increase the involvement of fathers in the upbringing of young children. In the long term, Ukraine should learn from other countries' successful experiences and allocate funds for the development of quality and accessible childcare services, including the expansion of daycare centers.

This publication is made possible with the support of the European Union under the project "Gender Analysis Centers Network: Strengthening Capacity Development for Advanced Policy Design, Impact Assessment, Strategic Advocacy, and Specialised Policy Communications," implemented by the Ukrainian Women's Fund. The responsibility for the content of this publication lies with the NGO "Vox Ukraine." The information presented does not always reflect the views of the EU and UWF.

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