The fertility rate in England and Wales is at an all-time low… let’s have a look at some of the economic and financial reasons for this.
Fertility Figures
According to the Office for National Statistics, the number of live births across England and Wales has dropped below 600,000 for the first time in 21 years.
Since 2010, fertility rates in England and Wales have been in overall decline. Between 2022 and 2023, the total fertility rate decreased from an average of 1.49 children per woman over their lifetime to 1.44, the lowest value since records began in 1938.
UCL Centre for Longitudinal Studies – Findings
Some people do not want to have children, some may be uncertain, and some may want children but have reasons for putting them off. Findings from the UCL Centre for Longitudinal Studies may help us better understand the fertility trends we are seeing:
- ‘Not feeling ready’ to have a child was the most common reason among those who definitely wanted to have children, or more children, but were not currently trying (47% of respondents)
- Financial reasons were the second most common reason for not trying to have children, or more children, now among respondents who reported they definitely wanted more children but weren’t currently trying (28%)
- Work or study was the third most common reason for not currently trying to have a child
- Respondents who reported they did not feel ready often also reported financial and work reasons, showing just how much financial and economic considerations are impacting the respondent’s decisions to not have children
- Concerns surrounding finances and work or study were more likely to put women off having children (or more children) than men (45% vs 40%)
Opportunity Cost of Children
Like with most decisions, we all face an opportunity cost from having children, as this is just the consequence of choosing one alternative over another, i.e, if we have children, what are the consequences of this choice?
Higher earners may be considered to face a higher opportunity cost from having children, because if they leave the workforce or reduce their hours after having children, they are losing more in wages. However, despite potentially losing more in wages, those on higher incomes may also be able to more readily afford childcare (assuming they have a higher disposable income after their expenditures than those earning less). Every person, whether their income is low or high, has financial and economic considerations when choosing whether to have children.
Having children often comes with a decrease in income (from reducing hours or leaving the workforce), and an increase in expenditures (kids are expensive).
Many people want to raise their children in an environment of financial stability. Therefore, when we consider the continued cost-of-living crisis combined with how high house prices are, it is perhaps easy to understand why many are choosing to have children later, or not at all.