Neil Johnson, Professor of Obstetrics & Gynaecology at Flinders University, took us through the numbers at a panel session for Fertility Counts Aotearoa at Parliament last week.
New Zealand’s total fertility rates hovered around two births per woman from the early 1980s through the mid-2000s, and even rose to almost 2.2 in 2010, before beginning a more rapid descent from about 2016.
The overall declining trend is hardly local to New Zealand. Birth rates have declined globally. Laudable progress toward gender equality and closing wage gaps mean that time spent out of the workforce is a lot more expensive than it was decades ago. The cost of fun experiences like travel has dropped considerably; having children means a couple foregoes more of those kinds of options.
The opportunity cost of children has increased, so couples globally are having fewer of them.
But that does not seem like a plausible explanation for New Zealand’s more recent drop. Births per woman were 1.97 in 2015, dropped to 1.7 by 2019, and fell further to 1.53 in 2024.
The panel session asked what ‘we’ might do to turn the tide on New Zealand’s falling birth rates.
Setting birth rates as a KPI target for government would seem like a rather bad idea. And trying to pay couples to have more children has not been hugely successful overall, though it can be very successful in encouraging couples to have their child after the date that the subsidies start.
But there are plenty of areas where successive governments have unintentionally made it harder for couples to have as many children as they might like. Removing those barriers, or at least reconsidering those policies’ effects on families and family size, could make more sense.
Housing is the most obvious culprit. But economic studies on housing and childbearing provide, at first glance, surprisingly mixed results. International studies can find that rising house prices increase fertility among couples who own a home while reducing fertility among couples who do not. So, the net effect can be tricky.
Fertility declines more rapidly with age than you might expect. Professor Johnson explained that a couple wanting to have a 90% chance of being able to have one child without assisted reproductive technologies had better start by age 32.
In 1991, 72% of those aged 30 to 34 owned their own home. In 2018, only 51% did – and 2023 data has not yet been released.
Renting in a normal housing market is fine. Renting in a housing shortage is awful, which also makes it awful for starting and raising a family.
Council rules that block new housing have been the cause of the housing shortage. Fortunately, there is bipartisan consensus that Kiwis need to be allowed to build. The shortage will ease.
Early Childhood Education is the next obvious target. NZIER’s Sarah Hogan put up figures showing that ECE costs for New Zealand families are among the highest in the developed world.
The government already provides ample subsidies for childcare. So, what drives exceedingly high ECE costs? Hopefully, the Ministry for Regulation’s review will provide some hints. If high ECE costs discourage families from welcoming another child, those costs need to be weighed against whatever benefits the regulations are meant to provide for children in ECE.
It is easy to miss the costs that regulations impose on children who get ‘priced out’.
An intriguing study by Jordan Nickerson and David Solomon looked at the effects of car safety seat regulation in the United States. Different states set different age requirements for car seats. Families with two children there were less likely to have a third child if they were in a state where their children were required to be in car seats. In those cases, deciding to have a third child could mean having to buy a different car – it can be hard to fit three child seats in a car.
They estimated that car seat regulations prevented about 60 children from dying in car accidents in 2017, across the United States as a whole. But those same regulations meant about 8000 families decided not to have a third child. Are we really sure that it makes sense to require car seats up to the age of 7?
Couples who wind up needing assisted reproduction do not just face the costs of treatment, they also often face shortages of donor sperm and eggs. Why? The government forbids paying donors beyond minor expense reimbursement. Everyone else in the process can be paid, including the doctors, but not the donors. The same prohibition creates a shortage of blood plasma. Lifting the prohibitions would solve the problem.
Governments should not target fertility rates. But if policy and regulation are keeping couples from having the families that they want, couldn’t government consider getting out of their way?
Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was first published HERE
The overall declining trend is hardly local to New Zealand. Birth rates have declined globally. Laudable progress toward gender equality and closing wage gaps mean that time spent out of the workforce is a lot more expensive than it was decades ago. The cost of fun experiences like travel has dropped considerably; having children means a couple foregoes more of those kinds of options.
The opportunity cost of children has increased, so couples globally are having fewer of them.
But that does not seem like a plausible explanation for New Zealand’s more recent drop. Births per woman were 1.97 in 2015, dropped to 1.7 by 2019, and fell further to 1.53 in 2024.
The panel session asked what ‘we’ might do to turn the tide on New Zealand’s falling birth rates.
Setting birth rates as a KPI target for government would seem like a rather bad idea. And trying to pay couples to have more children has not been hugely successful overall, though it can be very successful in encouraging couples to have their child after the date that the subsidies start.
But there are plenty of areas where successive governments have unintentionally made it harder for couples to have as many children as they might like. Removing those barriers, or at least reconsidering those policies’ effects on families and family size, could make more sense.
Housing is the most obvious culprit. But economic studies on housing and childbearing provide, at first glance, surprisingly mixed results. International studies can find that rising house prices increase fertility among couples who own a home while reducing fertility among couples who do not. So, the net effect can be tricky.
Fertility declines more rapidly with age than you might expect. Professor Johnson explained that a couple wanting to have a 90% chance of being able to have one child without assisted reproductive technologies had better start by age 32.
In 1991, 72% of those aged 30 to 34 owned their own home. In 2018, only 51% did – and 2023 data has not yet been released.
Renting in a normal housing market is fine. Renting in a housing shortage is awful, which also makes it awful for starting and raising a family.
Council rules that block new housing have been the cause of the housing shortage. Fortunately, there is bipartisan consensus that Kiwis need to be allowed to build. The shortage will ease.
Early Childhood Education is the next obvious target. NZIER’s Sarah Hogan put up figures showing that ECE costs for New Zealand families are among the highest in the developed world.
The government already provides ample subsidies for childcare. So, what drives exceedingly high ECE costs? Hopefully, the Ministry for Regulation’s review will provide some hints. If high ECE costs discourage families from welcoming another child, those costs need to be weighed against whatever benefits the regulations are meant to provide for children in ECE.
It is easy to miss the costs that regulations impose on children who get ‘priced out’.
An intriguing study by Jordan Nickerson and David Solomon looked at the effects of car safety seat regulation in the United States. Different states set different age requirements for car seats. Families with two children there were less likely to have a third child if they were in a state where their children were required to be in car seats. In those cases, deciding to have a third child could mean having to buy a different car – it can be hard to fit three child seats in a car.
They estimated that car seat regulations prevented about 60 children from dying in car accidents in 2017, across the United States as a whole. But those same regulations meant about 8000 families decided not to have a third child. Are we really sure that it makes sense to require car seats up to the age of 7?
Couples who wind up needing assisted reproduction do not just face the costs of treatment, they also often face shortages of donor sperm and eggs. Why? The government forbids paying donors beyond minor expense reimbursement. Everyone else in the process can be paid, including the doctors, but not the donors. The same prohibition creates a shortage of blood plasma. Lifting the prohibitions would solve the problem.
Governments should not target fertility rates. But if policy and regulation are keeping couples from having the families that they want, couldn’t government consider getting out of their way?
Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was first published HERE
2 comments:
If solo parents and state house dwellers are excluded the statistics are vastly more disconcerting. We are being overrun by a peasant class, as with most other third world countries The middle class has been conned to place materialism beyond parenthood..
No mention that those coming up to childbearing age have also been told 'we are all going to die' for most of their life. That to breed more children on our over populated earth is wrong. Then covid made life seem even worse, so what's the point in carrying on.
To blame housing, child care and car seats is taking the easy way out.
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