Fertility rates have fallen sharply worldwide in recent decades.  Global average fertility (TFR) dropped from ~5.0 births per woman in 1950 to ~2.2 in 2021 – roughly replacement level (2.1).  Almost all high-income regions are now well below replacement fertility.  For example, the OECD average TFR was only 1.5 in 2022 .  Within the OECD, Israel (2.9) and Mexico (1.8) are among the highest, while Italy and Spain are only ~1.2 and South Korea ~0.7 (see Table below).  The United States has also seen a long decline: U.S. TFR fell from ~2.1 in 1990 to just 1.62 in 2023 .  Demographers note that fertility tends to dip during recessions; for example, many countries saw birth rates drop after the 2008‑09 financial crisis .  The COVID-19 pandemic also precipitated a temporary “baby bust,” especially as inflation and job worries rose .  However, depressed birth rates have often persisted beyond recoveries, suggesting deeper structural shifts.

Country	Total Fertility Rate (births per woman, ~2022)
Israel	2.9
Mexico	1.8
France	1.8
Italy	1.2
Spain	1.2
South Korea	0.7

Economic Pressures and Fertility Decisions

Financial insecurity is a leading deterrent to childbearing.  A 2025 UNFPA survey of 14,000 adults in 14 countries found that over 50% of respondents identified financial worries—such as job insecurity, housing costs, and childcare expenses—as reasons for postponing or having fewer children .  In many places young couples face stagnant wages, precarious jobs (temporary contracts or gig work), and rising living costs.  Empirical studies confirm these effects: higher job insecurity and unemployment are associated with lower fertility.  For instance, when Spanish local governments subsidized conversion of temporary jobs to permanent ones in 1997, the fertility rate rose 1.4% .  Conversely, analyses find that fertility generally tracks the business cycle – falling in downturns (often 1–5% declines) – but the pullback is more persistent when uncertainty lingers.  Even with employment recovering post‑crisis, as in Norway after 2008, fertility often stayed low .

Key economic pressures include:

• Job and Income Insecurity: Worries about losing a job or income make many couples delay having children .  Surveys show large shares of working-age adults rank “losing my job” among top personal risks .  Real or perceived unemployment risk dampens fertility, even if unemployment is not yet high  .
• Housing Affordability:  Across OECD countries, housing has become a dominant family expense .  Since 2000, the share of household budgets spent on housing and utilities has risen markedly, reflecting steep increases in home prices .  Families often need a larger home for children, so high rent or mortgage costs directly discourage having more kids.  One study found that countries with faster-growing housing spending saw significantly lower fertility .  As a result, many young adults delay marriage or live longer with parents due to housing costs, postponing parenthood .
• Childcare and Education Costs: Childcare fees, schooling and other child-related costs are major financial commitments. In OECD analysis, the cost of childcare and early education is a key factor in family decisions .  Lack of affordable childcare means parents must either reduce work hours (lost income) or pay high fees, both of which depress birth rates.
• Debt and Living Expenses:  Rising student loan burdens and general household debt can delay family formation.  While specific cross-country studies are sparse, the UNFPA survey indicates “financial worries” broadly (which include debt and daily expenses) are decisive for many .  Inflation amplifies these pressures; for example, pandemic-era inflation showed a strong negative association with birth rates .

In sum, when the cost of children rises or incomes are insecure, couples tend to postpone or forgo childbirth.  As Becker’s economic theory predicts, higher costs and lower perceived gains from children reduce both the number and timing of births .

Psychological and Sociocultural Factors

Beyond pure finance, economic precarity also affects the psychology of family planning. In uncertain times, couples may feel they lack control or support needed for parenting.  Surveys find that fears about the future (economic or even climate change) deter some from having children .  For example, 19% of respondents in the UNFPA report cited “fears about the future” as influencing their decision to delay or avoid childbirth . In China, a viral phrase among youth – “the last generation” – encapsulates the sense that social and job uncertainty makes parenthood seem unachievable .

At the same time, values and norms have shifted.  Modern young adults often place more emphasis on personal goals, career and self-fulfillment, delaying childbearing for education or travel.  The OECD notes that as women’s education and labor participation have risen, the opportunity cost of motherhood has increased (e.g. career advancement forgone) .  Some explicitly choose lifestyles “outside of parenthood,” reflecting changing aspirations .  Moreover, evolving parenting ideals (the “intensive parenting” norm) mean having children now requires greater emotional and financial investment, making the prospect more daunting for insecure families .

Gender dynamics also matter. In many societies women still bear a heavier share of childcare.  Economic instability often worsens domestic burdens – for instance, job loss or pay cuts hit women especially hard if employers discriminate against mothers.  The Chinese example highlights this: young Chinese women cite “insecure work” and “unequal care burdens” as key reasons for declining fertility .  When women fear losing career gains by having kids – and if supportive policies are weak – many simply delay marriage or childbirth.

Policy Responses and Effectiveness

Governments have experimented with many pro-natalist policies to counter low fertility. Research indicates that comprehensive family supports tend to be most effective.  For example, multivariate studies find that generous cash benefits and subsidized childcare are positively associated with higher birth rates .  One global analysis concluded that “cash transfers and early childcare expenditures exhibit consistently positive associations with fertility, particularly in Europe and the Americas” .  Paid parental leave also helps, especially in contexts with very low fertility; in European settings longer paid leave correlates with higher fertility .

Concrete examples include: countries like France, the Nordic states and Canada that spend heavily (3%+ of GDP) on family benefits and childcare see relatively higher fertility (around the OECD average) .  By contrast, countries that simply added one-off “baby bonuses” without broader supports saw little sustained effect.  Indeed, the UNFPA report warns that coercive or simplistic incentives (e.g. forcing higher fertility targets or temporary cash bonuses) rarely work and can backfire .

Other policy levers shown to aid fertility include:

• Childcare and Early Education:  Broad access to affordable childcare/preschool lets parents work while raising children. OECD finds that higher enrollment of young children in public ECEC is linked to higher fertility, especially when paired with parental leave  .
• Paid Parental Leave:  Guaranteed paid leave (especially including fathers) reduces the career penalty of childbearing.  Countries that strengthened paid leave saw smaller drops in fertility, since couples did not have to choose entirely between work and family  .
• Housing Support:  Because housing costs are critical, some countries give targeted aid. For instance, subsidized mortgages, rent assistance or social housing programs can ease the family’s housing budget.  OECD analysis notes that measures improving rental affordability and homeownership for young families have been effective (e.g. Hungary’s expanded home‑ownership subsidies raised fertility to OECD average)  .
• Job Security and Income Support: Policies that stabilize incomes (unemployment insurance, job-retention schemes) also support family formation.  As noted, converting temporary jobs to permanent contracts raised fertility in Spain .  In the COVID era, countries that combined restrictions with generous income support saw smaller birth declines than those without  .
• Comprehensive Social Supports:  The UNFPA and OECD emphasize investing in affordable housing, decent work, parental leave and healthcare as long-term supports  .  Universal childcare, housing allowances, tax credits per child, and education subsidies are all examples of holistic measures that help families feel secure enough to have children.

Despite these tools, no single policy is a silver bullet.  Even countries with strong family policies (e.g. Japan, France) see declining fertility if economic insecurity remains high .  The key lesson is that policies work best when they reduce actual or perceived economic risk of childbearing – supporting parents early and consistently rather than dangling occasional bonuses .

Demographic Variations

Economic precarity affects groups differently.  Income Level: Lower-income households may want more children but find costs prohibitive, while higher-income couples often delay parenthood for career or lifestyle reasons.  Surveys suggest the poorest families cite financial barriers most strongly .  Education: Highly educated women tend to start families later (due to schooling and career) and often have fewer total births .  However, better-educated women also more often work full-time, so generous childcare/leave policies can raise their fertility.  Urban vs Rural: Urban living costs (housing, childcare) are generally higher, so city-dwellers tend to postpone childbearing more than rural families.  For example, Southern European countries (Italy, Spain, Greece) have both very high youth unemployment and housing prices, and correspondingly low fertility (~1.2) . In contrast, Nordic rural/urban gaps are smaller, aided by extensive social supports .  Age and Cohort: Younger cohorts increasingly delay or forgo children.  OECD data show the average age of first-time mothers rose to 30.9 years in 2021 (from 28.5 in 2000) .  Cohort analyses find that childlessness has roughly doubled between women born in 1935 and those born in 1975 in many countries (e.g. Italy, Japan) .  Lastly, minority and migrant groups often face intersecting economic and social barriers (lower incomes, discrimination, weaker support networks), which can both delay childbearing and reduce the ability to raise children.

In summary, fertility decisions in “uncertain times” are shaped by tangible economic constraints (income, costs, security) and by subjective perceptions (fear of the future, social values).  Recent research and surveys converge on the finding that economic precarity is a central factor in the global fertility decline .  Effective policy responses tend to be those that restore economic confidence for families – through jobs, housing and social supports – rather than one-off pronatalist incentives .

Sources: International demographic and economic analyses , including recent OECD and UNFPA reports, CDC vital statistics, and peer-reviewed studies.