There has been a lot of talk recently about the rise of the pronatalist movement in many parts of the advanced world.  Those who subscribe to the movement’s beliefs are on a mission to save humanity by having as many babies as possible.  Italian Prime Minister Giorgia Meloni and her Brothers of Italy party belongs to the group.

Perhaps a more famous personality who supports the cause is Elon Musk, a father of 11 children. The world’s most famous pronatalist has cited falling birthrates as  a bigger risk to civilisation than global warming.  Thousands other follow the ideology, which is to make it easier for everyone to have multiple children. But are they really model parents?

One couple in the USA who call themselves “CEOs and non-profit entrepreneurs” have reportedly acquired businesses with investor money that they improve and eventually sell “or turn into a cash cow”, as she puts it, ploughing their earnings into their charitable foundation, which encourages people to reproduce. They plan on having a minimum of seven children.

Then there is Quiverfull, the fundamentalist Christian belief that large families are a blessing from God. Others are atheists who believe in science and data. Their pronatalism is rooted in the rational altruism movement, which uses utilitarian principles and sound logic to determine what is best for life on Earth.

All pro-natalists are focused on producing the maximum number of heirs – not to inherit assets, but genes, outlook, and worldview.  Thus, OpenAI CEO Sam Altman has invested in several reproductive technology startups, one aiming to engineer human eggs out of stem cells, another screening embryos for health outcomes.

“Of course I’m going to have a big family,” says Altman. “I think having a lot of kids is great.”  Meawhile, the Skype co-founder and Estonian billionaire Jaan Tallinn (father of five) has donated just under half a million dollars to a pronatalist foundation.

Whether one agrees or not with them, there is no doubt that the advanced world is facing a looming crisis. As societies become more prosperous, people are having fewer children   ̶   after 200 years of huge population growth, birthrates are plummeting.  An average of 2.1 babies need to be born per woman for a population to remain stable; in Malta the birthrate is currently 1.13   ̶   a drop of 61% over six decades.  So the title of this piece seems quite appropriate: getting the right answer to how many babies a couple produce is crucial for a stable population.  

A pension timebomb

According to a paper published in the Lancet in March, 97% of the planet – 198 out of 204 countries – will have fertility rates below what is necessary to sustain their population by the end of this century. In the short term, this is creating a pension timebomb, with not enough young people to support an ageing population. If current trends continue, human civilisation itself may be at risk.

The only places where the birthrate is not falling to unsustainable levels are countries where the average citizen earns less than €4,730 a year, he continues.  In Malta’s case households could afford to have 2.9 children on an average GDP per capita of €298 in 1963, but apparently found it difficult to have more than 1.13 children on an average GDP per capita of €36,223 last year.

I know all hell with break loose if the average Maltese reads this, but the only way our country can survive is through immigration from those very poor countries where birthrates continue to be high.  OK, except if we start having more children. Easier said than done. What are the chances that our birthrate can be reversed any time soon?   Slight.   

Cost of raising a child

It is estimated that in Europe, the average cost of raising a child between the ages of 5 and 18 is around €240,000.   The cost in Malta wouldn’t be that different.   In the table, I show what it might cost the household in each of the five different income classes, assuming that the parents want the child to have the same quality of life as they have.

The average cost would be €18,460 per annum for 13 years, with higher or lower costs depending on the quality of life of the household concerned.  We are talking here of some 10.6 years of work required by a parent in each household to fund the rearing of the child.  If there is more than one earner in the family, then the period would obviously be lower.   This means that a one-earner household would have to work almost one-quarter of its working life to pay for the rearing of a child.

I think this shows quite clearly why, from the economic point of view, the cost of rearing a child today is beyond the means of most families.  Although the government has a range of benefits   ̶   one-time grants, children’s allowances, and in-work benefits   ̶   to assist families, these are nowhere near enough. 

I estimate the average direct assistance paid would amount to some €8,820 over 13 years.  To that, one would have to add benefits in kind, such as free childcare (say, €8,850 over three years), free education (€156,000 over 13 years assuming that each child does the same number of years in schooling, including tertiary education), and free school transport (€7,800 over 13 years).  That adds up to €172,620, to which one could add free healthcare.

Yet, though potentially the State is providing some 72% of the cost of rearing a child, it seems that prospective parents are still not willing to bring more into the world. Presumably, from the economic point of view, this free ride is already being factored into the decision.

Stimulating the fertility rate

Some back-of-the envelope calculations reveal that, if the Government were to give parents an additional allowance of €2,690 per year for 13 years for a second or third child, this would cost €4.5 billion.  That’s a big expenditure, but not if you see it in the context of the potential increase in GDP associated with the additional 130,200 people in the population, where the expenditure would be 3.4% of the GDP increase.

It might seem outrageous that I am talking about stimulating the fertility rate through more financial incentives.  Yet, it has been established by various studies that one factor in fertility intention is the child’s value, which is considered the essence of the parents’ assessment of their children. Positive values include emotional and economic interests, identity acquisition, achievement of perfection, and survival of family. Negative values include emotional, physical, economic, and family costs; restrictions; and lost chances.

As a matter of fact, numerous theories on the effect of child’s value on fertility have been proposed. One of these theories is the economic theory, which considers children as economic commodities. In this theory, fertility behaviour in families is considered as a function of the law of supply and demand and the cost and benefits of children.

Among economic theories, the Leibenstein theory (Harvey Leibenstein, ‘An Interpretation of the Economic Theory of Fertility: Promising path or Blind Alley’, Journal of Economic Literature, 1974) assumes that the children’s economic profit influences the decision of parents on the number of children. In this theory, the child’s economic dimension is related to a higher fertility rate, but the emotional dimension is not related to increased fertility.  The reason is that the emotional dimension is supplied by the presence of only one or two children. Actually, emotional dimension is more prominent in prosperous societies like Malta, where raising children is expensive and children don’t contribute to family economy and old age security.

However, having children is not just an economic decision.  It depends on a whole host of other factors, including a woman’s age when she has her first child, educational opportunities for women, hormone levels, obesity, issues with reproductive organs, access to family planning, lifestyle issues, and government acts and policies that affect childbearing. 

Getting the balance between all these factors right is a tall, if not impossible, challenge.  Governments can only do the best possible under the circumstances to increase the odds that people will have more children.