According to available data, birth rates in Leinster and Dublin have fallen dramatically in the last decade (2009-2019). What does this mean for Ireland’s most populous province? Is it all doom and gloom, or are there potential upsides? Can Ireland prepare for a so-called ‘population time bomb’ and what are the results of such an implosion?
Ireland’s birth rate has fallen 24% in five years. That statistic is shocking in its own right, but if you dig deeper into the data, you will find that the pace of this trend is even more concerning – or heartening, depending on the economic and social outlook you have.
For hard-nosed Kensyian economists, declining birth rates spell Armageddon. Older, less productive populations, means less money to spend on consumer goods, no money to sustain pensions, regional isolation for older people, youth emigration, falling property prices, more grannies than grandchildren and an antiquated, aged society with increasingly conservative views that propels itself into an inevitable death spiral.
The optimist, however, will see falling birth rates as a correction of sorts. Yes, there will be short term economic pain, but the long-term environmental gains for the country will be worth it. If the birth rate declines, there will be a period of imbalance where the old outweigh the young, but the seniors will pass, and the young will then inherit the earth (so to speak), a much less populated and much greener place to be. A reset if you will.
There are environmentalists who believe lower birth rates should be embraced and celebrated for the good of the planet. They understand that there will be initial demographic problems, but they can be addressed. Growth economics, they say, as well as growing populations need to be thrown out as outdated ideologies and damaging practices. A new economical paradigm needs to evolve that centres on treating the problems of old age along with a massive redistribution of wealth. Such thinking, however, doesn’t chime with capitalist ideology … yet.
Birth rates in Dublin are low and getting lower
The data we have is exact. Birth rates in the province of Leinster, Ireland’s most populated region, are declining.
According to the data available from the Central Statistics Office (CSO), in 1916, the number of births in Leinster stood at 24,575, and the birth rate was a robust 21.1 per 1,000.
By 2012 the number of births in Leinster was 41,196, but the birth rate had fallen to 16.4 per 1,000.
By 2019 there were 59,796 births in Leinster, 1,220 fewer births compared with 2018; this means a birth rate of just 12.1 per 1,000 population, a rate decrease of 0.5 from 2018.
What this shows is there is a steady and noticeable reduction in the birth rate in Leinster in the past 104 years.
It has been a century of decline.
Declining birth rates have a significant and relatively immediate effect on economies and societies. Not many of them are positive.
The year 2020 has come and passed, and it marks three decades of falling birth rates in Ireland. The birth rate is now the lowest since records began 150 years ago, and there are only signs of this decline gathering pace.
So, what are the reasons for the declining birth rate and what will be the outcomes?
The reasons are many and varied, but there are common underlying factors, and the most significant one is money or lack of it. Ireland’s tax and welfare systems are weighted against low and middle income, working couples with children. The average wage in Ireland stubbornly hovers around the 30k mark and hasn’t risen in five years. A couple earning this kind of money soon find themselves under severe financial pressure while trying to raise a family.
The data shows wage stagnation hurts
The various socio-economic reasons we can seek data on include economic uncertainty (rising); wage stagnation (stagnant and sometimes back-peddling); the cost of housing (prohibitive); the rise in rental living (soaring), the severe and increasing costs of childcare (punitive); the lack of family support networks due to geographical dispersion (a real issue); food inflation (continuing); the soaring cost of living (still soaring); and the economic confidence, or lack of confidence, of younger people.
The erosion of financial wellbeing is considerable. Its implications are far-reaching. Poverty is one thing, having no cash flow is hard, but financial wellbeing is an entirely more significant problem. The financial wellbeing of people in Ireland circumscribes Ireland’s falling birth rates.
According to Bank of Ireland data, which looks at consumer levels of financial wellbeing across Ireland, one third (34%) of people in Ireland are anxious about personal finances.
More than half (55%) have no pension, and one in four would last less than a month without having to borrow if they lost their primary source of income.
Ireland has a national financial wellbeing score average of 61. This means that as a nation, we are “managing” financially but not “thriving”, which is the optimum category of financial wellbeing. One-quarter of those classed as financially struggling are ABC1 consumers, and almost one in five (18%) of Irish households at the higher end of the income spectrum are struggling or stretched with their finances. Nearly half (49%) of consumers don’t feel confident about managing their money.
Financial wellbeing is felt in the core of peoples’ thinking, it’s felt in our attitudes to life and to creating new life. Financial wellbeing can be described as ‘confidence’. Our declining birth rates are directly related to our economic confidence or lack thereof. Our financial wellbeing is a strong indicator of why people are not investing in children and not investing in our future.
Children are the future
In terms of economic growth, the phrase ‘children are the future’ couldn’t be more correct. Without children, countries, societies and economies don’t have a future. Why? Simple economics.
Young people grow things, and with no growth, you get stagnant industries and crumbling social infrastructure. The young are the energy and the value in every society. They create opportunities; they tackle problems; they strive to change things and innovate.
Older people stagnate, they become more conservative, they don’t take risks, they entrench their ideas and ideologies and the country stalls and then declines. Old legs bad, young legs good.
Are there any quick fixes?
Society’s stakeholders have to step up, governments have to step up, legislators have to act, but most importantly, private enterprise needs to get a grip.
Without a cohort of young, energetic workers and consumers, private enterprise will lose out the most – industries will crumble, revenues will fall, the black market will rise.
Private companies need to ensure that they are paying their staff enough to improve their financial wellbeing. Workers need to have the confidence and the desire to have children, and a range of private supports can be put in place to assist professionals.
Proper supports for mothers, fathers and young families need to be put in place, and they can be through the tax system.
There is little value in giving money to everyone to have children; this strategy can be mistreated. The Irish taxpayer currently pays €140 a month for each child born in Ireland. This money is given to everyone, regardless of their income and wealth.
For working parents, would it not be better to reward child-rearing via the tax system? If a parent or couple has/have their first child, they could receive a significant tax break for the first five years of the child’s life. Having a second means another tax break and so on.
In Hungary, for example, the government introduced several measures in 2019 to address the meagre birth rate. One of the most dramatic steps came with the governmental guarantee that women would become exempt from income tax after the birth of their fourth child.
What is the long term future?
If birth rates continue to decline – and the data shows this is happening – what are the long term implications for society and the economy?
Unfortunately, there would be profound consequences.
Low birth rates lead to a shortage of skilled workers. Governments collect lower incomes due to the reduced number of people paying tax, which will not be enough to run the country.
The country will begin importing new skilled people through immigration, and this will change the demography of the country.
If there is little or no immigration, then the old-age dependency ratio increases and the tax burden on the young will grow.
Since young people primarily support consumer spending, the economy will shrink to match the consumer base; this leads to permanent recession, deflation and in most cases, low unemployment.
Low birth rates are a sign that a country’s people don’t feel confident or financially capable of rearing children. If Ireland’s low birth rates are to be addressed we must follow the money.