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Researcher: Cost of living largely behind birth rate slump in Estonia

A baby.
A baby. Source: Priit Mürk/ERR

Allan Puur, Tallinn University professor of population sciences, tells ERR in an interview that births are down by a quarter over the last four years in Estonia, whereas the slump has been the steepest in the last two years. He gives soaring cost of living as the main short-term reason.

Data from Statistics Estonia shows that just 980 children were born in Estonia in October. No month this year has seen 1,000 births. What is happening in Estonia? Are we seeing the concurrence of a falling number of women in the childbearing age, their age and extraordinary social circumstances? Births are down by almost a quarter compared to 2018!

Indeed, we seem to be headed for a new negative record this year. It is quite likely that we will see fewer than 11,000 births this year.

Talking about the reasons, we need to distinguish between long and short-term factors. Sharp slumps that resemble a crisis are associated primarily with short-term factors, which have hit all countries in the region to a greater or lesser extent recently. They are the COVID-19 pandemic, the Russia-Ukraine war and the deteriorating economic situation.

Births fell the most in 2022 (-12.2 percent). We cannot blame it squarely on the coronavirus as the pandemic landed in early 2020 and its negative effect would have manifested already in 2021 statistics. Instead, Estonia and many other countries saw births go up the year before last. The Ukraine war also does not explain the 2022 reduction in births. Its start on February 24 may only have affected the number of births in the last few months of the year.

This leaves the cost of living, which started heading up in 2021, as the likeliest cause. Price advance peaked in the middle of last year. Therefore, the dynamics of the growing cost of living best explains the slump of the past two years.

Polls commissioned by the Pere Sihtkapital Foundation and carried out by Norstat in late 2022 and early 2023 support this hypothesis. In them, over 1,000 people were asked whether the pandemic, war or cost of living had affected their plans of having children, with the latter given as the reason most often.

It is a little peculiar in that the 2008-2009 economic crisis was far more serious than the current one, if only thinking back to unemployment spiking and wage cuts. Yet, the situation today seems to have a greater effect on birthrate.

It's interesting in that the effect of economic crises usually manifests through growing unemployment. But the cost of living has also made it much harder to cope. We can turn to recent poverty statistics for proof, according to which the number of people living in absolute poverty grew by 2.5 times in 2022. The consumer confidence index was also very low.

Because the parental benefit is calculated based on the person's salary before they got pregnant, the rising cost of living has impacted the real value of the benefit. Postponing the decision to have children is hardly surprising in light of all this. It is also possible that people's expectations have grown compared to 2008 and 2009, which is why uncertainty sparks stronger reactions.

What do you mean by expectations? Estonia is quite generous when it comes to supporting young parents.

I was not referring to the state's contribution, but rather expectations in terms of what is considered "normal" quality of life. What a person expects to afford and achieve. Cost in terms of time and money tends to outweigh the self-realization aspect of having children. Having and raising children may not be as much of a priority today than it was 15-20 years ago.

What has been the effect of having children later in life? People become parents much later than in past decades, which is also leading to fewer births.

The age of childbirth started growing in Estonia in the early 1990s. The average age at which people gave birth to their first child was 22.5 then, while it's nearing 29 now. In the West, the same process started in the 1970s and the age of childbirth has exceeded 30 years in some countries. Estonia is headed in the same direction and we will see the average age of having children continue to grow for at least another decade.

This affects the annual number of births and all other annual birthrate indicators. That is why Estonia has 1,000 or more fewer births annually compared to a hypothetical situation of a high but stable age of childbirth.

Births headed down in the turbulent times following Estonia regaining its independence. Do we simply have fewer women in the childbearing age now?

We can calculate the effect of this factor quite accurately. Having fewer fertile generations means 150-160 fewer births annually. This counts for just 10-15 percent of the slump we've seen in the last two years. But we need to keep in mind that the effect is not going anywhere, and that fewer generations in the childbearing age will mean approximately 150 fewer annual births for at least the next 15 years. It adds up.

What about changes in how many children people want? It seems today's young people want fewer kids.

That figure has come down too. But, unlike births, we have no annual statistics for this. A family and births study from last year allows us to compare how many children people wanted between the 1970s and the start of the 21st century. The figures reveal a consistent decline. People born in the early 1990s and 2000s want fewer children than the replacement rate of 2.1. Today, young people in their late twenties want 1.9 children on average.

The replacement rate is at 2.1?

Yes, this would ensure a generation of young people no smaller than that of their parents.

You're saying that the rather sharp decline of the last few years is mostly caused by the rising cost of living. But economic crises end and prices will stabilize eventually. Does that mean we have reason to hope births will also head back up?

Yes. Looking at short-term change, 2024 will probably see slightly more births than 2023. So while the situation will improve somewhat, we have no reason to expect the wider trend to be reversed. Factors keeping births down over the long term aren't going anywhere, and we are likely to see more negative records before the decade is out.

There will be roughly 25 percent fewer births this year compared to five years ago. What does that spell for the future?

That the relatively smaller generations being born today will also be relatively less numerous when they start having children. If generations of children are consistently less numerous than those of parents, we will enter what [sociologist] Rein Taagepera has described as a decline spiral. This should give society pause – whether to try and do something to achieve larger generations or whether to bet on people coming here from faraway countries to make up the difference.

The outlook seems rather bleak...

Undoubtedly. The picture might not be all that desolate when looking at individual years, while if we put together the last five years, things start to resemble the great drop of the 1990s. Institutions we have elected and put in place should probably try and decide what should be our reaction.

The GDP shrinking by 24 percent would hit each and every one of us very painfully. But the birthrate falling by as much seems little more than statistical data in a graph somewhere. It has no bearing on our current coping and well-being, while it has a massive effect for social sustainability. And a reaction is in order. The Ministry of Social Affairs has launched a more thorough analysis of Estonia's family policy, which effort should be completed by the end of next year. It is a necessary and timely step, but we also need to follow it up with practical action.

And now for the million-dollar question. How to make sure Estonians start having more children again? If indeed there is anything that can be done.

Estonia has done quite well in these terms in the 21st century. Estonia is fifth in the OECD in terms of relative family policy spending. So we have done a lot. Several analyses also suggest that policy measures we have taken, such as the parental or large family benefits, have had a positive effect on the number of births. The situation would be worse without these measures. But it is likely that more needs to be done, including things no one has thought of yet. Because people wanting fewer kids is a game-changer for Estonia.

Family policy has been centered on helping families do what they want to do. But this approach does not answer the question of whether it is okay to influence how many children people want and how to go about it in an acceptable manner. Of course, we are not talking about crude reproduction propaganda and sticking posters on bus stop pavilions. We need to start by asking ourselves why having a family and children is becoming less important. It goes beyond material means as the trend is the same also in the Nordics that are clearly more prosperous than Estonia.

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Editor: Mirjam Mäekivi, Marcus Turovski

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