Tim Sargent: We are not taking Canada’s fertility crisis seriously enough

Families matter. Not only are families the place where children, the future of any society, are born and raised, but for most people, forming a stable and loving relationship, setting up a home, and raising children are amongst the most important and fulfilling achievements of their lives. Having strong and stable families is an essential goal for any society that wants to maximize human flourishing, both now and in the future. 

And yet, not just in Canada but across the Western world, families have been buffeted for more than a generation by changing economic and social trends, including the decline of well-paying jobs for less-educated workers, changing laws and social norms around marriage and divorce, the rise of the internet and social media and its impacts on everything from mental health to dating behaviour, declining housing affordability—particularly for first-time buyers—and in the last three years, COVID and the resultant lockdowns.

Now that COVID appears to be behind us and the first smartphone generation—Generation Z—is entering adulthood, this is a good moment to take stock of Canadian families: is being in an intact two-parent family uniquely beneficial? Are younger generations finding it harder to form and maintain families? What is happening to birth rates? Are more children living in one-parent families?

In a new study for the Macdonald–Laurier Institute, I look at these questions. 

It is very clear from the data and the associated literature that the lifetime benefits from being raised by two biological parents, getting married, and then staying married, are very significant indeed for most people both in terms of income and broader well-being: 

• An adult aged 25 to 34 in a couple has a standard of living one-third higher than a single person.
• A child in a two-parent family has a standard of living 50 percent higher than a child in a one-parent family.
• Married adults have higher longevity and better overall mental and physical health than single adults.
• Children raised by two biological parents do better than those raised in one-parent families or in families with a step-parent.

The situation in Canada

However, despite these advantages, young people in Canada are less likely to form couples and have children, and when they do, a significant proportion of children will see the break up of their family. The data are clear that:

Young Canadians are delaying leaving home: One-fifth of adults (and one-quarter of men) aged 25 to 34 live with their parents, and this proportion has been growing over the past 20 years and is significantly higher than in the U.S. or the U.K.

Canadians are remaining single longer: Almost 60 percent of 25- to 29-year-olds, and a third of 30- to 34-year-olds, are single and have never been married. This proportion has been growing over the past twenty years and is higher than in the U.S. or the U.K.

Canadian women are having fewer babies: The fertility rate in Canada has dropped to 1.3 children per woman, down from 1.6 only six years earlier, because of a rapid decline in fertility among women under 30. Canada now has the third-lowest fertility rate in the G7, significantly lower than in Germany, the U.S., or the U.K., and close to Italy and Japan.

A high proportion of Canadian children no longer live with their original parents: A third of Canadian children will see their original families break up by the time they are 14. More than a quarter of Canada’s children live in a one-parent family, significantly more than in France or the U.K., and more even than in the U.S..

The roots of the issue

What is causing these trends? This is a more difficult question to answer. There seems to be a mix of economic and social factors at work. 

While the economic position of young adults has actually been improving, they are certainly finding it harder to afford a house. Housing prices have risen considerably since 2006, both relative to other prices in the economy and to other countries, and in consequence, homeownership rates are down, particularly for younger people.

People are also spending longer in higher education, which often means delaying marriage and childbearing until they have a stable job. 

At the same time, the mental health of young people has deteriorated sharply, and anxiety about the future has risen significantly. Only half of women aged 15 to 30 reported very good or excellent mental health, down from three-quarters 10 years previously. The proportion of Canadians aged 15–34 hopeful about the future has declined by 15 percentage points since 2016. 

And finally, could lower fertility simply be a result of people not valuing children as much? This does not seem to be the case. In a recent study commissioned by the think tank Cardus, women said that they would like to have 2.2 children on average, which is well above the current level of 1.3. This is consistent with evidence from other countries.

What can we do?

What does all this mean for governments? Nothing good.

A society with fewer couples, high rates of single parenthood, and fewer children will have higher rates of loneliness and depression, lower incomes for adults, worse outcomes for children, and will struggle to afford health care, pensions, and elder care for its elderly population. 

Governments therefore have every reason to worry about the trends in family formation and fertility we have uncovered and to look at policies that would try to ameliorate the negative trends we are observing. 

Any such policy agenda would have to consider all three life cycle events where we see negative trends: leaving home, forming a couple, and having children. Policymakers need to find ways to allow young people to marry, afford a house, and have children earlier.

Such policies could include: 

• Making housing more affordable, especially single-family homes;
• Using the tax and transfer system to incentivize family growth and the raising of children; 
• Helping parents with the cost of child care, preferably in a way that increases the supply of places;
• Finding ways to reduce the formal educational requirements for jobs so that people can enter the labour market earlier.

However, perhaps the most important step in addressing declining family formation, dropping marriage rates, and deteriorating fertility is to first recognize that these problems exist, that they are serious challenges facing our society, and that they should be a top priority for policymakers in Canada.