The number of births in advanced economies has largely rebounded to levels before the coronavirus pandemic, a Financial Times analysis shows, a recovery that experts say was partly because of stimulus policies deployed to mitigate the economic impact of the crisis.
Births began to fall sharply in late 2020 after Covid-19 took hold and people were confined to their homes in lockdown, worsening an already perilous demographic trend of population decline in wealthy nations.
The trend mirrored drops during the 1918 flu pandemic, the Great Depression and the global financial crisis in 2008. But an analysis of national data shows a rapid rebound in most developed countries.
“The short-term decline in births observed in many countries is consistent with other historical crises . . . but in the case of Covid-19, these declines have been more shortlived,” the UN said.
This is largely because of government spending and efforts to make and distribute Covid vaccines.
The economic uncertainty caused by the pandemic was “addressed by the stimulus packages and the expansionary reactions of central banks”, said Klaus Prettner, professor of economics at Vienna University of Economics and Business.
The pandemic effect
When many countries first imposed lockdowns to counter the pandemic in early 2020, sexual activity declined, according to a survey by French polling company Ifop.
Between the end of 2020 and the first half of 2021, nine months after the first lockdowns, countries ranging from China to France reported their lowest number of births on record. Italy had fewer births in 2021 than at any time since the country was created in 1861.
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Fertility rates refer to the average number of babies a woman is projected to have over her lifetime. It is generally accepted by demographers that a country’s population can only grow without net inward migration if couples have at least 2.1 children on average. Many developed economies already have fertility rates well below that.
Kate H Choi, director of the Centre for Research on Social Inequality, said people tended to have fewer children when faced with “a long-lasting, catastrophic event resulting in high levels of uncertainty”. Covid-era couples “may not wish to bring a child into this world if they don’t know where their next pay cheque is coming from”, she said.
But births began to recover later in 2021 in countries including the US, the Nordics, Australia and Israel — returning to, and in some cases exceeding, the pre-pandemic trend in what demographers said was a catch-up effect.
In England and Wales, births decreased by 5 per cent in the first half of 2021 compared with the same period in 2019. By the second half of the year, the number of births had returned to the 2019 level. By the end of 2021, the countries had registered the first annual rise in births since 2015.
After experiencing a sharp decline in births, Spain had more births in March and April 2021 than in the same period in 2020. In Germany, there were more births in March 2021 than in any other March in the past 20 years.
In the US, the Census Bureau observed that the number of babies born between December 2020 and February 2021 was unusually low, equivalent to 763 fewer births each day in December. “That is very likely the result of the Covid-19 pandemic,” said Anne Morse, a demographer at the Census Bureau.
By the second half of 2021, the US recorded the same number of births as the same period in 2019.
Population experts and economists credit the monetary and fiscal stimulus launched by many governments in the early months of the pandemic as a crucial factor that helped stave off a longer-lasting decline in births.
Karoline Schmid, who heads the fertility and population ageing section at the UN Department of Economic and Social Affairs, said stimulus initiatives played a role in preventing a steep drop in fertility rates by providing a financial buffer against economic uncertainty.
“Fertility declines during and immediately after economic crises are caused by couples postponing childbearing due to rising unemployment, increasing job insecurity and reduced household income,” she said. “The monetary stimulus from governments in some countries helped to prevent sharp fertility drops early in the pandemic.”
The baby bust
That still leaves the world facing the same demographic time bomb as before the pandemic: declining fertility rates that threaten to slow global growth and leave countries contending with the costs of ageing populations.
The global fertility rate peaked at five in 1960 and has since been in freefall. As a result, demographers believe that, after centuries of booming population growth, the world is on the brink of a natural population decline.
According to a Lancet paper published in 2020, the world’s population will peak at 9.7bn in about 2064, dropping to 8.7bn around the end of the century. About 23 nations can expect their populations to halve by 2100: Japan’s population will fall from a peak of 128mn in 2017 to less than 53mn; Italy’s from 61mn to 28mn.
Low fertility rates set off a chain of economic events. Fewer young people leads to a smaller workforce, hitting tax receipts, pensions and healthcare contributions.
“An economy with a labour shortage problem may experience higher labour costs, declining productivity and a lower standard of living,” said Choi.
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Christopher Murray, one of the Lancet report’s authors, said it was hard to overstate the economic and social impact the decline in fertility would have.
“We will have to reorganise society,” he said.
But the future does not have to be apocalyptic. As well as widely reported benefits to the environment, the decline in fertility could lead governments to invest more in education, according to Prettner.
“When fertility rates decrease, governments have more resources to spend in schooling,” he said. “Many of the possible negative economic consequences of declining fertility can be compensated by the associated higher productivity that these children later have within the labour market.”
Additional reporting by Valentina Romei in London
Source: Economy - ft.com
