In rich countries, working women and more babies go hand in hand

IT IS WELL known that fertility rates have declined as women’s labour-force participation has increased. Handling a career as well as juggling childcare appeared to leave little room for big families. But new research now helps to explain a striking reversal of that trend in rich countries: higher female participation rates are associated with more babies.

In 1980 rich countries with high numbers of female workers had lower fertility rates than poorer ones with more jobless women. Traditional economic models explained this well. Wealthy parents spent more money on their children and therefore wanted fewer, and working mothers faced higher opportunity costs from child-rearing. By this reasoning, as more women joined the labour force, birth rates should have fallen. But by 2000, after the share of working women had increased by 17% in places such as America and Britain, that trend had reversed. Among rich countries fertility rates were highest in those where the most women worked (see chart). Demographers were puzzled. What had changed?

A new working paper published by the National Bureau of Economic Research argues that the reversal was driven by both cultural and policy changes. In countries such as America and Norway it became economically and socially easier to hold down a job and be a mother. As a result, the birth rate increased. But in places where the two remained in conflict, for example in Italy and Spain, women still worked less and had fewer babies (see chart).

The authors find that four main factors lead to higher fertility rates: flexible labour markets, co-operative fathers, favourable social norms, and good family policies. In Norway, for example, where childcare is highly subsidised—in 2021 the government spent $29,726 per toddler—both the female employment rate and the fertility rate are among the highest in the OECD, a club of mostly rich countries. No doubt 49 weeks of parental leave helps too.

Public spending, however, does not solely determine child-rearing decisions. Social factors also play a role. America ranks near the bottom of the OECD on childcare spending, dishing out just $500 per child each year. It is also the only country without national paid maternity leave. But men in America do more housework and take on more child care than in most OECD countries.

Getting men to do their share of the household work may not be simple for governments—or women. Shifting social norms takes time and increasing spending on child care or improving parental-leave policies—as Democrats in America have tried to do—can be politically fraught. But the trend is clear: making it easier for mothers in rich countries to work is a good way to help bump fertility rates. ■

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