The Vanishing Future: How Low Birth Rates Threaten the Sustainability of Public Finances in Industrialized Countries

A recent study from the OECD organization reveals that the birth rate in industrialized countries is at an all-time low. This decline in birth rates is posing a significant threat to the sustainability of public finances, with the average number of children per woman having more than halved from 3.3 in 1960 to 1.5 in 2022.

The OECD warns its member countries to prepare for a future of lower birth rates, as the population will not be able to sustain itself without immigration. The ideal birth rate needed for sustainability is 2.2 children per woman, but most OECD countries have already fallen below this figure, with the exception of Israel.

The decrease in birth rates, combined with an aging population, poses a significant risk to public finances. This trend could lead to the closure of schools in various parts of Europe, Japan, and South Korea. The OECD suggests that countries can improve birth rates by supporting gender equality and a more equal division of labor, as well as providing financial support for families with children.

Despite efforts by some countries like Hungary to increase birth rates through family benefits and tax breaks, many countries are still struggling with low birth rates. The trend towards individual freedom and alternative lifestyle arrangements is shaping the population structure in what the OECD calls the “second demographic transition.” Childlessness is also on the rise in many countries, with the average age of first-time mothers increasing.

In conclusion, it is essential for countries to address this issue urgently and implement policies that support family formation and child-rearing to ensure a sustainable population for the future. Only then can we hope for economic growth and stability in these industrialized nations