Last week the Australian Bureau of Statistics (ABS) released its latest data on Australia’s birth rates. The data indicated there has been a drop of 4.6 percent from the ABS’s 2022 statistics. The country’s fertility rate is now at 1.5 births per woman, below the replacement level of 2.1. This is consistent with other developed countries throughout the world, but it’s increasingly a trend in developing countries too.
As Nicholas Eberstadt wrote recently in Foreign Affairs, we are now entering into a new age of depopulation in which the world’s population will begin to decline. This will create an array of domestic and geopolitical consequences that will, in turn, reshape the world.
The reasons for this decline in fertility are numerous and complex. Shifting social structures and norms, the weakening of religion, urbanization, and greater female education and career prospects all play a part. But so do economic factors like the cost of housing, where couples who may want more children find it simply unaffordable. The longer period it takes to reach financial stability means that having children is often postponed – lessening the number of children couples can have.
Alongside this, women are – rightly – having greater expectations on partnership and fatherhood, and men’s response to this hasn’t been one of rising to the occasion. The backlash to women’s advancement we are currently witnessing is not giving women greater confidence in finding the right man to mate with.
The primary concern that lower birth rates are creating for Australia is one of an aging population. The key issue for countries is to maintain a favorable dependency ratio – which is the number of people outside the workforce compared to those within it. There are natural dependencies that are unavoidable, as children and teenagers require schooling and retirees need pensions and greater healthcare. The objective is to have a large cohort between the ages of 18-65 to provide the tax revenue to pay for this. Fewer babies means fewer people entering the workforce, all while lifespans increase.
Australia is able to compensate for lower birth rates with a strong immigration program. This can slightly offset the number of retirees, but given that the median age for migrants to Australia is currently 37, there remains a diminishing of youth in the country, and this can have a profound impact on what governments deem to be important.
If politicians already struggle to think long-term, an electorate dominated by retirees and mid-late career professionals isn’t going to entice them to think more about the future. The share of public transport users in Melbourne, for example, is highest in the 10-29 age bracket, and falls off considerably by people’s late-30s. Fewer young people in the country will mean politicians are less incentivized to invest in new public transport infrastructure. This will have the knock-on effect of limiting urban culture of cities, and their ability to be hubs of creativity.
In a country desperate for a more complex economy, enhancing creativity is essential. Younger people are more entrepreneurial and willing to take risks by nature, but they require the conditions for this spirit to thrive. Governments at both the federal and state level need a youth-focus, yet lower birth rates may mean that the democratic calculations of political parties take precedence.
There may need to be a rethink of Australia’s immigration program. The focus over the past few decades has been on attracting highly skilled migrants. This has been driven by two components. The first being economic, importing the skills that Australia currently requires to fill existing jobs. The second component is social: attracting people able to walk into well-paid jobs and have the social capital to integrate easily into Australian society. This second component seeks to ease any suspicion of migration within the broader population.
While this has worked reasonably well for Australia, the problem with predominantly targeting highly skilled migrants is that it takes people many years to build the skills required to qualify. If Australia is lacking in youth, then importing 37-year-olds doesn’t really solve the problem. An immigration program that skews further toward young people may be what the country requires.
However, the creative spirit of youth is something very difficult to quantify. Older migrants with known skills and capabilities are easier to slot into existing roles within the country. A nebulous notion about the role youth play in fostering new ideas is less likely to fly with hard-nosed bureaucrats in Canberra, even if younger migrants may ease the stress on Australia’s dependency ratio.
The Australian government may have to think more creatively itself to increase the birth rate. Government payments like the “baby bonus” have proven ineffectual, but more structural financial incentives like more affordable housing might. A cultural shift in men’s attitudes toward women would also be welcome, regardless of whether it leads to more births or not. In order to future-proof the country, Australia needs to actually focus on its future.