Fertility and family policy in Australia

Research Paper No. 41 – February 2008

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The fertility rate in Australia, like almost all Organisation for Economic Co-operation and Development (OECD) countries, is below the level required for population replacement. This has resulted in an increasingly active debate surrounding possible reasons behind the fall, future likely trends and realistic strategies to stem it.

This paper provides an overview of trends in fertility in Australia and the potential implications of these trends. The various explanations that have been provided for fertility trends and key family policies are discussed.

A number of explanations for the decline in fertility in developed countries have been proposed, yet the topic remains hotly debated. There is growing evidence that a range of factors are related to fertility rates, although there does remain uncertainty as to which factors are most important in explaining the falls. While studies have produced differing results, there does seem to be growing evidence that social and economic policies do have an important role in stemming the declines in fertility rates.

The link between the level of public financial support and fertility rates for OECD countries are discussed. Government support to families with children as a proportion of GDP has increased rapidly in Australia over the last 25 years, with the level having gone from being at the lower end for OECD countries to being well above the average.

The paper then reviews findings from the Fertility Decision Making Project. This project is based on the results of a major national survey of Australian families that was conducted in 2004. The study provided information on the factors that individuals report as affecting their fertility decisions. It was revealed that most people want to have children. Furthermore, the number of children they would ideally like to have is above replacement fertility on average. It also revealed that the number of children they want to have is greater than the number they expect to have. The reasons for respondents revising their family size aspirations downward as they grow older include financial and work-related reasons, partnership issues, age, health and fecundity.

We conclude that policies that lower the direct and indirect costs to families of raising children, and allow women to combine paid employment with childrearing are likely to have a positive impact on the fertility rate (that is, stem the decline or "boost" the rate). Policy changes in Australia over the last 25 years have reduced the direct costs of childrearing through expanding the coverage of the family payment system and increasing the level of some payments. The recently introduced maternity payment also provides significant financial support to families following the birth of a child.

In order to enhance fertility rates, it is important that families have support as the child grows up, not just when the child is a pre-schooler. Parents also need to feel confident that they can manage to raise their children while also enjoying opportunities for personal development, beyond the world of family life. Despite Australia's economic prosperity, people remain concerned about their capacity to create and maintain a family environment in which children can be nurtured and supported financially and emotionally. Such concerns, real or perceived, reflect macro-level trends in economic and employment security; relationship formation pathways and their stability; and micro-level concerns about personal capacity to be a good parent. Strategies directed towards helping people achieve their childbearing aspirations need to tackle people's sense of security in each of these three domains. The data suggest that strategies should target forces both at the macro- and micro-levels - for neither level acts in isolation.

In conclusion, governments need to use a combination of approaches that is based on the recognition that the relatively low fertility rate is not due to a "lack of wanting children". If Australia is to boost its fertility rate - or at least maintain the current level - the message that raising children has an intrinsic richness and is an enjoyable part of life needs to be conveyed widely. To be effective, however, such a message must reflect reality. Couples need to have personal resources such as a secure income stream, a loving and stable relationship, and the skills and confidence to be parents. They also require access to community resources, including family-friendly workplaces and the confidence that they have a strong, continuing commitment from the community. It is of the utmost importance that parents do not feel alone in raising the next generation of citizens.