The economics of having children

There is something quietly absurd about a government minister standing at a podium, urging citizens to have more children. Not because the concern is illegitimate – the economics of an ageing population are real, and the arithmetic of pension systems does not lie – but because of the world that exists just outside the frame of that speech. The climate reports that arrive with the regularity of bad news. The political instability that has become so normalised we have stopped calling it a crisis. The violence, the cruelty, and the ambient dread of a present that feels increasingly difficult to justify bringing someone new into this world.

And yet, please have the child!!

The global birthrate has been falling for decades. In 2023, South Korea recorded a total fertility rate of 0.72, the lowest ever measured in any country in modern history. Japan has spent thirty years watching its population shrink and its government launch increasingly elaborate interventions, from state-funded dating apps (China & Japan) to financial incentives for newborns. Hungary under Viktor Orbán has staked an entire political identity on pronatalist policy, offering tax exemptions, subsidised housing, and interest-free loans to families who produce enough children. Italy, facing demographic collapse, has appointed a minister for the birth rate. France offers some of the most generous family support in the world and still watches its edge downward.

The message from governments is consistent: we need more people, and we need them soon. What varies, and what is rarely interrogated, is the moral and philosophical audacity embedded in that statement.

The economic argument and what it conceals

Is it worth being precise about why governments care? The concern is not, at its heart, about children. It is about labour. It is about the ratio of working-age people to retirees and about the sustainability of welfare states designed in an era of population growth that can no longer be assumed. Fewer births today means fewer taxpayers tomorrow, and the architecture of most developed nations depends on that pipeline remaining full.

This is a legitimate economic problem. But framing falling birthrates as the primary reason for the economic crisis does something revealing: it treats children as units of future productivity rather than as human beings entering a world they did not choose. It transforms parenthood into a kind of civic duty, an act of service to the state’s balance sheet. When Hungary offers financial rewards for having four or more children, it is not celebrating family life; it is purchasing it. And like most things that are purchased rather than chosen, the transaction reveals something uncomfortable about the relationship between the buyer and the bought.

What the economic framing also consoles is the structure failures that make parenthood feel untenable in the first place. Housing costs in major cities have risen so sharply that the idea of raising a child in a stable home, in a place with decent schools and green space, has quietly become aspirational rather than normal. Working conditions for young adults in many economies are precarious, with short-term contracts, gig work, and unpaid internships that extend well into the mid-twenties, creating a generation that does not feel financially anchored enough to commit to another person, let alone a child. These are not personal failures of ambition or courage. They are structural conditions produced by decades of policy choices. The same governments now wringing their hands over birthrates made many of those choices.

The gender question nobody wants to answer

Any serious discussion of declining birth rates that does not centre on gender is a discussion that has chosen convenience over honesty.

The burden of parenthood does not fall equally. Across most societies, including those with generous parental leave policies, women still perform the majority of unpaid childcare, domestic labour, and the invisible mental load of family management. Motherhood continues to carry significant career penalties in most industries. Women who leave the workforce, even temporarily, often find it difficult to re-enter at the same level. The gender pay gap, which stubbornly persists in every country, becomes especially visible when a household has to calculate whether a second income is worth the cost of childcare.

Women, particularly educated, urban women with professional prospects, are the ones most likely to delay or forgo having children. This is not irrational. It is, in many cases, a straightforward response to an incentive structure that asks them to sacrifice disproportionately for a project the state has decided it needs. When South Korean women, who face some of the most intense workplace discrimination and cosmetic expectations in the developed world, choose not to have children, they are not failing their nation. They are declining a deal that was never fair.

Pronatalist policies that focus on financial incentives without addressing the gendered structure of domestic labour are, at best, incomplete. At worst, they are a form of bargaining that refuses to name what it is actually bargaining over.

The overpopulation paradox

Here, the picture becomes genuinely complicated, because the conversation about declining birthrates in wealthy nations cannot be fully separated from the global reality of population.

The world’s population crossed eight billion in 2022. Growth is slowing, and projections suggest it will peak sometimes in the second half of the century, but the planet’s carrying capacity, under current systems of resource extraction and energy use, is already under severe strain. Climate change, biodiversity collapse, and freshwater scarcity are not abstract future threats. They are present conditions.

In this context, the sight of European governments lamenting low birthrates carries a particular irony. The countries most anxious about underpopulation are, by and large, the countries whose historical and current consumption patterns have done the most damage to global ecological stability. The average child born in the United States will generate roughly seven times the carbon footprint of a child born in Nigeria over their lifetime. When wealthy nations talk about needing more people, they are, at least in part, talking about needing more high-consumption people, which is precisely the variable the planet can at least afford to increase.

This does not mean that demographic decline is not a real and serious challenge for specific societies. It is. But it does mean that the framing of falling birthrates as a crisis requiring urgent reversal often lacks the ecological honesty the moment demands. The question is not simply how do we get more births but what kind of world are those people being born into and what will they cost?

Asking people to be optimistic on their behalf?

Perhaps what is most striking about contemporary pronatalism is its fundamental demand: that ordinary people feel optimistic enough about the future to choose to bring someone into it.

Optimism is not a policy instrument. It cannot be mandated or subsidised. And yet it is precisely what declining birth rates in the face of climate anxiety, political polarisation, economic precarity, and geopolitical instability represent: a quiet, collective withdrawal of optimism. Not a statement of nihilism, but a realistic assessment of conditions. When young people in South Korea, Italy, or the United Kingdom say they do not want children, the most common reasons they give are financial stress, uncertainty about the future, the state of the environment, and the feeling that the world is becoming harder and crueller rather than better.

These are not neuroses. They are observations.

Governments that wish to address falling birth rates must eventually reckon with the fact that no financial incentive can substitute for a livable present. The desire to reproduce, to build something that extends beyond oneself, to welcome vulnerability into one’s life in the form of a child, depends on a basic trust that the world is worth inhabiting. That trust is eroding, and it is eroding because of the conditions that policy has made, and policy could, at least in part, change.

Better housing. More stable employment, genuine equality in domestic life. Healthcare systems that do not terrify. A credible response to climate change that offers something other than managed decline. These are not just social goods; they are, in the most literal sense, the conditions under which people choose to have children.

What is actually being asked

At its most honest, the government's case for higher birth rates is this: we built a system that depends on perpetual growth; we are now experiencing the consequences of that system becoming unsustainable; and we would like you – especially your body, your labour, and your sacrifice – to help us extend it.

That is not an argument without merit. Societies do require demographic renewal. The collapse of pension systems would cause real suffering to real people. The problem is that it is an argument being made without sufficient acknowledgement of what is being asked or of the failures that have made the ask so difficult to accept.

To have a child is an act of radical optimism. It is a wager on the future made with one’s entire life. It requires trust in institutions, in the economy, in the climate, and in the basic stability of the world the child will inherit. When that trust is absent, no amount of tax relief will restore it.

If governments are serious about birth rates, rather than simply paying lip service while leaving the structural conditions unchanged, they might start by making themselves worthy of the optimism they are asking for.

That, at least, would be a beginning.