Australia’s fertility rate is at a historic low at 1.5 births per woman – and new research suggests that women retiring later in life could be part of the problem. The research, released on Monday, shows women whose mothers are not old enough for the pension are less likely to have children.
But does this mean lawmakers should drop the pension age?
Perhaps not.
A number of financial and logistical barriers prevent people from starting or growing their families and what this new evidence suggests is the need for better policies in our homes, workplaces and communities that address these for everyday Australians.
How is the pension age linked to the birth rate?
In 2023, Australia lifted the pension age to 67 allowing more women to remain in the workforce for longer than ever before.
Women are working and building careers at unprecedented rates, but new research has found a link between women retiring later in life and Australia’s reduced birth rate.
Data analysed by research e61 Institute reveals that women whose mothers are not old enough for the pension are less likely to have children.
E61 Institute Research Manager Pelin Aykol says it appears to be an unexpected “trade-off”.
“Raising the pension age has kept women contributing in the workforce for longer, but the trade-off looks like a reduction in their daughters’ fertility rates,” she says.
“This may be because women are more likely to have children when their mothers are available to help them with childcare.”
The findings are based on over two decades of data collected in the Household, Income and Labour Dynamics in Australia (HILDA) Survey between 2001 and 2022.
Women whose mothers were not old enough to receive the pension were 4.5 per cent less likely to have children.
Those who do have children, end up having fewer than peers with mothers who are eligible for the pension.
“We find that grandmothers’ pension eligibility has a large impact on fertility, similar to the impact of the introduction of paid parental leave, which increased the average number of births by five per cent,” she says.
“The effects were even greater among women with lower wealth and education levels, suggesting they rely more on grandparental childcare.
“With Australia’s fertility rate at a historic low of 1.5 births per woman, policymakers should carefully consider impacts on fertility when designing policies that encourage labour force participation among the older population.”
The study isolated the impact of pension eligibility on fertility reveals the pivotal role grandmothers play, with data revealing that grandparental care is predominantly carried out by women, particularly when they hit the pension eligibility age.
In future research, e61 plans to explore alternative childcare policies to help offset the loss of grandparental support.
Making parenthood more accessible
Limited access to affordable childcare and support from grandparents can influence decisions around having a child.
They’re among a number of factors making it more difficult for people to start and grow families.
Professor Leah Ruppanner, a founding director at Melbourne university’s Future of Work Lab, says a population’s total fertility rate must be above 2.1 births per woman for it to remain the same.
At this rate, the population would neither grow nor shrink.
“This is because we need to have enough babies to replace both parents after they die – one baby to replace the mother and one to replace the father, and a little extra to account for infant mortality,” she writes in The Conversation.
This once happened in countries like Australia, South Korea, the UK and US but in recent years that rate has dropped.
In South Korea, the birth rate has fallen to the point that more people are dying than being born.
“As a result, the population is getting older, poorer and more dependent on others for their care,” she says.
Although women are entering and staying in the workforce for longer than ever before, issues like the gender pay gap and preventative workplace policies around flexible hours and paid parental leave can all contribute to the challenges of starting or growing a family.
She says young people are also finding it much harder to achieve “traditional markers of adulthood” like stable jobs and buying a first home.
Without these, people often delay starting a family or put it off altogether.
“The cost of children is astronomical,” writes Professor Ruppanner.
“Average childcare costs in Australia have outpaced inflation. School tuitions, even for public schools, absorb a significant portion of parents’ budgets.
“If you multiply this by more children, the costs go up.”
Holding women back from pursuing careers, education and business opportunities is not the answer to addressing these issues.
Neither is dropping the pension age so grandmothers can retire early only to take on the burden of caring for children again.
Instead, governments and workplaces can adopt a more pro-family agenda that encourages and empowers both men and women to take on childcaring duties.
Better subsidies that offer current and hopeful parents some financial relief around housing, healthcare, education and childcare can help alleviate some of the pressures being felt around the country.
Reviewing structured work and school hours to better suit modern families can also make a difference.
As more businesses adopt a four-day work week, there are more and more conversations about what traditional school hours should be.
“The reality is even in many two-parent households two incomes are necessary to just get by,” says The Parenthood CEO Georgie Dent.
“In single-parent households, a parent being able to combine paid work with school hours isn’t a luxury add-on – it’s a necessity. But fitting that between 9-3 and school holidays is an impossible game of Tetris that no amount of time management can overcome.
“Creating the necessary ecosystem for parents to reasonably combine caring for their children, with being able to financially provide for their family, means looking at how workplaces and schools – in addition to public policy settings – impact families.”