Why Fewer People Are Having Kids and What It Means for Our Future

If you’ve been paying attention to global demographics, you’ve probably heard one message repeated with increasing urgency: people just aren’t having enough kids. But why? And what does it mean for the future of our economy, workforce, and even retirement systems? This is a problem that’s far bigger than cultural shifts or delayed parenthood. It’s a systemic issue deeply rooted in economics, housing, work, and inequality.

Let’s go back to a time when fertility soared—the post-World War II baby boom. Soldiers returned home, jobs were stable, housing was affordable, and consumer optimism was off the charts. It created the perfect environment to start families. But here’s the kicker: similar economic conditions after World War I didn’t lead to the same boom. That tells us there’s more to the story than just a strong economy. Today, we’re facing almost the opposite scenario. Housing is unaffordable, childcare costs more than rent in many cities, and job security is shaky. In the U.S. alone, high childcare costs are costing the economy over $122 billion per year. Meanwhile, countries like South Korea are now offering monthly stipends to new parents just to keep their populations afloat. The truth is, over the next 20 years, the world isn’t worried about overpopulation—it’s bracing for population collapse.

Historically, fertility rates dropped dramatically after World War I, well before modern contraceptives or dual-income households were the norm. Back then, replacement rates were higher because of child mortality—more than three children per woman just to keep the population steady. Now, we have lower child mortality, but we’re still seeing record-low fertility. So clearly, something else is at play.

Income inequality might be the missing piece. It’s one of the strongest predictors of low fertility rates. During periods of reduced inequality—think New Deal policies or the GI Bill—birth rates actually rose. Economist Thomas Piketty’s work supports this, showing an inverse relationship between inequality and fertility. When the middle class thrives, people feel more financially secure about having children.

Urbanization adds another layer. Cities may offer opportunity, but they’re also prohibitively expensive. Historically, places like London actually saw their populations shrink due to high mortality and poor living conditions—growth came from rural migration. Today’s cities still act like population black holes. Families are squeezed out by high rents, long commutes, and limited space. Even those who want kids often find that city life makes it unsustainable.

To make up for shrinking native populations, many high-income countries have turned to immigration. While this helps fill labor shortages, it can also strain housing markets and widen inequality, especially when policy doesn’t keep up. Some governments are pushing for more “homegrown” workers, but that’s easier said than done when people can’t afford to start families in the first place.

One bright spot during the pandemic was the rise of remote work. When both parents were home, birth rates rose in some areas. Working from home gave families the chance to relocate to more affordable places and save on childcare. But now that many companies are demanding a return to the office, those gains could be erased.

We also need to zoom out and look at the long arc of human history. For 10,000 years, population growth was nearly flat. Then the Industrial Revolution kicked off a boom with better health, nutrition, and productivity. But it didn’t help everyone equally. Industrial cities like London still had to rely on outsiders to grow. That trend of urban dependency continues today, and unless cities become more livable for families, birth rates will remain depressed.

Here’s the bottom line: You can’t fix fertility without addressing the root causes—income inequality, unaffordable housing, high childcare costs, and inflexible work environments. Yet many policymakers hesitate to make those changes, choosing instead to throw money at the problem or hope it resolves itself. It won’t.

If we want people to have families, we have to build a world where that feels not just possible, but rewarding. And that means rethinking how we design our cities, our jobs, and our safety nets. Because declining fertility isn’t just a personal issue—it’s a generational one.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.