Is More Child Care the Key to Raising the Birth Rate?

This week's Economist has a lead story on how governments in low fertility countries can effectively raise the birth rate. Their answer is child-care to encourage women to have babies and a career at the same time. They draw explicitly from a new study from the OECD of pronatalist government policies in the richer countries. 

Yet not all state baby bribes are equal. “The kind of spending matters more than the amount,” says Olivier Thévenon, who tracks natalist policies at the OECD, a club of mostly rich countries. Longer maternity and paternity leave are nice but seem not to encourage childbearing. Cash payments and gifts encourage couples to have babies more quickly but not to have more than they otherwise would.

The clear winner, according to Mr Thévenon’s research, is subsidised child care. Decent, affordable nurseries make it easier for women to combine work and motherhood. They seem to be the main reason France and Sweden have robust fertility rates—though mass immigration from more fecund countries has helped them a little, too.

This is well known among demographers but is only part of the larger issue of gender equality. If you give women freedom to become educated and have a career, but society does not treat them as equal to men, the result tends to be very low fertility. Cultural shifts that create gender equality are almost certainly the best path to fertility levels that are close to the replacement level.

I do have to object, however, to a comment that the Economist makes about the need for public policy that tries to influence the birth rate.

Many liberals argue that the state should keep its nose out of family matters, but in practice this is hard. Simply by creating pension systems paid for out of general taxation, governments have drastically reduced the private incentive to have children—who were once the best security parents had in their dotage. A more useful question is which baby-boosting policies work.

This is simply wrong. The history of Social Security is that it arose because children were not supporting their parents as death rates declined and the elderly lived longer. The idea of children as a source of social security is largely a myth based on ignorance of the fact that for most of human history until the 20th century, parents were very unlikely to retire and be forced to live on welfare from their children--who might or might not provide it in any case. The change in death rates over the last two centuries--but especially the last century--has altered generational relations in ways that make the modern world largely unrecognizable to earlier humans.