Declining fertility rates are a worldwide phenomenon, with Australia no exception. Australia’s fertility rate has fallen to a record low of 1.5 births per woman – well below the 2.1 needed for population replacement. This report examines both the drivers of fertility decisions and the lessons from past policy interventions.

The decline in fertility has been driven by three factors: later parenthood, a decline in the number of children per mother, and an increase in the share of women not having children. The report shows that fertility decisions today are shaped by multiple factors, with financial pressures, career-family trade-offs and access to child care becoming increasingly important, particularly for young women.

Declining fertility is unfolding alongside, and contributing to, population ageing, with implications for labour supply, consumption and productivity. Policymakers may decide they need to respond by implementing measures that seek to increase fertility. The paper looks at what lessons can be learned from past policies that provided supports to new parents – the First Child Tax Refund, the Baby Bonus and Paid Parental Leave. 

Key findings

• The universal $3,000 Baby Bonus boosted births, particularly among low-income mothers and those in their 20s and 30s but had little effect on high-income families.
• The First Child Tax Refund and Paid Parental Leave, by contrast, had limited impact on fertility.