Radical Solutions to Collapsing Fertility (2024)

Fertility is collapsing in most of the world, and we aren’t really sure why. For the first time ever, humanity is probably below the replacement fertility rate. Unless things change, most countries will shrink in population within a few decades. This will have a range of destabilizing social and economic consequences and possibly precipitate “population death spirals,” especially in middle-income countries.

It’s time to find solutions to low fertility, or humanity will become an elderly and stagnating species at best, and collapse into chaos at worst.

Economic Solutions to Low Fertility

There is an ongoing debate about the causes of declining fertility worldwide with the two main contenders broadly falling under the cultural and economic. Cultural causes include things like women’s empowerment and education, women entering the workforce, decreasing desirability of marriage and children, social changes like abortion and the widespread use of birth control, increasing cosmopolitanism, liberalism, and the like. Economic causes might include things like urbanization, rising incomes, increasing costs of childrearing (childcare, education, activities), or growing opportunity costs of parenthood (lost income, travel, leisure). The more one thinks about these concepts, the more one realizes that they shade into each other. But the effectiveness of a solution depends on correctly identifying the cause of the fertility collapse.

It is a common trope that “nothing works” to fix fertility collapse. Governments have started to recognize the looming issue of low fertility and are experimenting with ways to fix it, but with very little success. Rich countries in East Asia and Europe have tried a wide array of policies including:

• Generous paid parental leave

• Government sponsored matchmaking

• Subsidies for egg freezing

• Subsidized childcare

• Banning abortion and contraception

Korea is even considering paying parents $70,000 for each child born. But none of this seems to have had much effect—the places with the lowest fertility have been unable to meaningfully reverse the downward trend. Hungary, a country controversial for its conservative government which has implemented a range of ambitious fertility policies, has seen a modest fertility bump from 1.25 children per woman in 2010 to around 1.5 today. Policies include tax benefits, home and car subsidies, forgivable loans and grants, childcare and kindergarten subsidies, student loan forgiveness, extended parental leave, and various other perks including free in virto fertilization (IVF) treatment. While fertility has improved, it has come at a non-trivial monetary cost, with over 5% of GDP dedicated to fertility subsidies, and the fertility rate is still well below replacement.

However, although much has been tried, in the grand scheme these measures are modest. Hungary forgives the income tax of women who have four of more children for life… but are women with this many children even working? This could obviously be made more generous. If the fertility policies Hungary has introduced can bump fertility from 1.25 to 1.5, could they get the fertility rate to the replacement level by simply cranking up the dial?

Bryan Caplan, an economist, recently proposed a more radical version of the Hungarian tax credit for mothers. He writes:

Here’s a comprehensive tax modification I’ve been daydreaming about. While my first choice is just giving people a tax holiday every time they have a kid, imagine the following alternative. After you calculate your regular federal tax, there’s one final adjustment.

Number of Kids Federal Tax Adjustment

Zero +50%

One +0%

Two -20%

Three -40%

Four -60%

Five -80%

Six+ -100% (income tax-free for life)

“Natalist policies don’t work” is a common mantra, but you’d have to be crazy to think that this wouldn’t sharply raise fertility. And the natalist effect would almost surely be highest for high earners, because their current fertility is so low and the tax code is so progressive.

If Hungary’s policy is a squirt gun, Caplan’s modest proposal is the Schwerer Gustav. Caplan’s may be effective not just because it cuts taxes for people who have children, but it dramatically increases taxes for people without children. This wouldn’t be the first time a society placed a tax on the childless; Ancient Rome, Stalin’s Russia, and Mussolini’s Italy all gave it a try, among other distinguished company. It might just be a question of what can be dragged inside the Overton window.

Would these tax expenditures bankrupt the state? Cutting taxes on most people certainly won’t impede economic growth, but it will need to be paid for somehow, with either higher taxes or lower spending elsewhere. The tax on the childless will pay for some of it, but cutting spending or raising taxes elsewhere might be required.

Cultural Solutions to Low Fertility

Although financial incentives might work, they would require dramatic and radical changes to policy—economic solutions exist mostly in the realm of theory. Coming back down to Earth, we find when examining the global fertility map that unusually fertile regions or groups typically achieve this with culture, not policy. Israel is perhaps the quintessential example of a rich country that maintains high fertility, and it likely achieves this largely through its unique religion, culture, and sense of place and persecution.

In the United States, places with higher fertility such as Utah also encourage a culture of childrearing, paired with religiosity. The first country to enter the demographic transition with falling fertility was France, likely due to a secularizing culture. Secularizing 18th century France experienced a decline in fertility before richer but more pious neighboring regions. Today, high fertility Mongolia maintains a cultural legacy from Soviet era that valorizes fertility; women who have six or more children are awarded the "First Order of Glorious Motherhood," and about $154.

Another clue that cultural changes are primarily driving the shift can be found examining the age distribution of mothers. In the United States, the decline in fertility is mostly due to a drop among mothers younger than 25. The fertility rate among mothers older than 30 has actually risen substantially since the 90s. This indicates that women are choosing to have children later in life—indeed, the drop in teenaged pregnancy has long been an explicit policy objective, and often for good reasons. By largely eliminating teenage pregnancy (presumably through a combination of education and abortion), some desirable social outcomes were achieved, but at a cost to the overall fertility rate. Ultimately, this is a cultural shift that is driving declining fertility.

Can we Change a Low Fertility Culture?

While culture may explain more of the variation in global fertility than economic policy, is culture even malleable? Is it something that can be influenced by those in charge of a country? Much of what drives culture is determined by a decentralized “marketplace of ideas.” What levers are there for policymakers to pull?

One proposal, seemingly originating from strategist Samo Burja, is to implement “Affirmative Action/DEI for parents.” Much as civil rights legislation de facto or de jure requires companies to maintain a certain number of gender, racial, and sexual minorities in positions at all levels of a company, perhaps firms could simply be required to staff up with parents. This could start at the executive level and expand to all layers of business. It would serve as a de facto wage subsidy to parents, insulate them from the competition of careerist childless, outsource the costs of pronatalism from the public to the private sector, and raise the stature of parents. By requiring that elites be parents, the social status of parenthood could be raised, hopefully passing a cultural norm down to the rest of society.

While economists might prefer more elegant tax incentives, perhaps the inelegant policy hammer of simple employment mandates and perks would work better in the short run. Taking a lesson from Mongolia, a cultural policy of valorizing parents could be pursued; mothers with many children get to board airplanes first, get priority queues and discounts for public services, discounted fares on public transit, special parking spaces, mandate child-friendly spaces in offices… maybe there is even a “national mother’s day” or “Mother’s Month” with parades, awards, and speeches. Mothers with, say, four or more children would be treated like veterans—and this is not inappropriate, since mothers do make bodily sacrifices to protect and secure the future of culture and society.

Whether any of this would be deemed constitutional is another story. Practically speaking, governments probably need to undertake an assortment of measures, both economic and cultural, and fight their way through an array of formidable legal and electoral obstacles. There is no silver bullet, and any pronatalist measure will need to overcome a powerful coalition of ideological and cultural opponents.

At the end of the day, there is probably more than one way to achieve fertility targets. Both culture and economics are incentives that are known to influence human behavior, and each could work in isolation. Restricting ourselves to just one is a needless false dichotomy. The enormous iceberg representing the dire consequences of low fertility floats ominously in the distance, but it is directly in our path—a slow-moving but certain crisis that humanity will pass through or address one way or another. It is safe to assume that policy measures to address this will become more, not less radical as the crisis unfolds over the coming years.