Rise in childless couples? Blame the bubble

By Leith van Onselen

Earlier this week, The ABC published a report arguing that childless couples will be Australia’s most common family type by 2023:

One sociologist says the trend is already happening, and future government policy will determine whether the traditional family model continues to exist.

For many millennials… changing financial and social realities are important factors in the choice to have kids.

…couples [are] delaying their decision to extend their families, a trend which paired with Australia’s ageing population means the nuclear family is in decline.

The Australian Bureau of Statistics estimates between 2023 and 2029, there will be more people in a relationship living without children than families with kids…

University of Melbourne sociologist Leah Ruppanner said while the trend of not having children varies between countries, it is already happening in Australia…

Bronwyn Harman of Edith Cowan University, who studies social responses to childless couples, said the public has become more accepting of non-traditional families…

She expects the 2016 Census data, which has not been fully released yet, will show an increase in households without children.

This was followed by another article bemoaning the fact that more and more children are continuing to live with their parents well into adulthood. From The Daily Telegraph:

Get used to that childhood bedroom, you’ll be there for the next 40 years. Every week the great Australian dream seems to slip further away…

Sure they might go to uni but their industry of choice will probably change more rapidly than their qualification, which will have a hefty student debt attached anyway. Children are already priced out of the communities in which they grew up.

…a 2017 Perceptions of Housing Affordability report by property analytics and information company CoreLogic RP Data confirms the “great Australian dream of home ownership” as “an insurmountable challenge”.

“A growing proportion of younger generations, while overwhelmingly maintaining a sustained appetite to live the dream, are staying home with parents — increasingly into their 30s — to save for deposits,” it says in doom-laden pages.

“It captures the degree to which parents are being expected to assist their adult children in either saving for — or paying for — a home, and reveals how families with low incomes and or young children are becoming more vulnerable to mortgage stress”…

The empty nest is the forever nest. Youth see low wage growth and being locked out of buying a home. The family dynamic is changing and from an independence point of view, that is bad news for everyone.

The above articles should hardly be a surprise to anyone, given Australia’s politico-housing complex has deliberately engineered expensive housing via the combination of:

  • Egregious tax breaks like negative gearing, the capital gains tax discount on investment properties, and the excessive taxation of deposits;
  • Mass immigration;
  • Restrictions on fringe land supply and planning; and
  • Inadequate infrastructure investment.

To the above flawed housing policies you can also add increasing higher education costs (and debts), as well as poor labour opportunities for young people.

Since the GFC, overall youth employment has fallen by 3.6% in trend terms, despite the 6.9% lift in the youth population over this time, with full-time jobs down an incredible 21.2%. By contrast, the overall number of jobs for the rest of the labour force has risen by 15.3%, with full-time employment up 10.7% (see below table).

Youth underemployment was also at an all-time high 17.7% as at February (see next chart).

The fact is, young people need financial stability – and preferably a roof over the own heads – before they even contemplate having children. However, with one of the world’s most expensive housing markets, disappearing full-time jobs, and rising university debts, such stability is become rarer in Australia, so it’s no wonder couples are delaying (or choosing to go without) having children.

The saddest part is that policymakers’ likely response will be to ramp-up immigration even further in order to inject younger workers into the economy and ‘solve’ the fake ageing population problem (even though immigration is totally ineffective in this regard). In turn, increased mass immigration will further raise housing costs, as well as boost competition for jobs and lower wages. It will make the whole problem of Aussies not having kids and staying at home even worse.

unconventionaleconomist@hotmail.com

Comments

  1. Well – hey – one good thing that could come out of this is that we’ll stop hearing about the “mom-and-dad investors” … Am I right or am I right?

    Thank you, that you, you’ve been a great audience!

    • haha, what’s sad is that our Government thinks that they can just import immigrants who have already “pre made children”. God forbid there were white kids running around this country.

      The missus and I have talked about kids, the problem is living costs in this country and having a place to live that’s stable. I’ve said several times that we should leave the country. She won’t have a bar of it, wants to be close to her family. Which I understand but surely a family can understand why their kids would leave given the enormous expectations put on them with the burden of debt.

      I said look if we live in the US in many cities you can get a home for $100-$200k. We can fly home to Australia multiple times per year. It would still be less than the cost of a mortgage in Sydney or Melbourne.

      • The advantages of having grandparents that are willing to help with kids, and live close by can not be underestimated. I have only have one child, and have two supportive grandparents. It would be extremely difficult doing it without their support. Friends that have moved away and are doing it on their own seem to have a much more difficult life. We rent and are doing pretty well at the moment….Don’t think we could do any more than one, although the grandparents are applying the pressure.

      • “our Government thinks that they can just import immigrants ”

        “thinks they can is right” – 70 countries in the world with below replacement TFR is 70 countries who don’t now, or won’t within a couple of generations, have people to send us, as well as being a list of countries likely to want to import their own premade kids soon a la Norway, Germany and even Japan.

        http://www.businessinsider.com/japan-permanent-residency-rules-relaxed-2017-3?IR=T
        https://www.bloomberg.com/quicktake/japan-s-shrinking-population

      • ErmingtonPlumbingMEMBER

        “The advantages of having grandparents that are willing to help with kids, and live close by can not be underestimated.”

        Yes, it makes a massive difference,…Ours have been there for our 2.
        Don’t put it of for to long Gav,..we have heaps of friends who did,…and for many it became heartbreakingly to late,… Inspite of 10s of thousands of dollars worth of IVF treatments,…some we know, well over 50k worth! and still no child,…women run out of time long before we do.

        Fuck the money Gav,…it’s why we are here Brother!

        Not related to any of the above,…but.

        Chris Cornell died today.

        https://youtu.be/rbQKTD3dR3s

        https://youtu.be/S0GKu5_QOvU

        https://youtu.be/h3Qjk9LqDvw

      • Gav , I’m with you on moving OS. And I won’t be coming back to see greedy boomer parents! They are the ones fuckung us over collectively with government policies that they support. They can ponder what their grandkids ate up to or get on a plane and visit us. Or and this is a big Or , they can stand together and stick up for Australian kids and grandchildren. Yeah i know , not going to happen. Australia will be owned and run by Chinese and Indians soon , and they will turn it into a shithole like where they come from! Just visit Eastwood or Chinatown or anywhere else they have set up camp.
        Turned into filthy shitholes with no manners.
        Enough said , blood pressure rising. ?

      • Immigrants have a more realistic view and less expectations from life than the average Aussie simply because what they can achieve here is not achievable in their countries. They are happy to work from 9 to 5 or have two jobs and having two kids or more and having to pay a million bucks for a house and a holiday every four years even if it takes them 30 years because where they usually come from, that is not even a possibility . While Aussies on the other hand, prefer to be childless or maximum have one child and be able to travel and buy/lease a new shiny car a year, eat out ….
        Not saying that the average Aussie is wrong to do things that way, on the contrary …

      • drsmithyMEMBER

        The advantages of having grandparents that are willing to help with kids, and live close by can not be underestimated.

        +Zillions

        Our number came up on the Green Card Lottery last year, and while I’ll follow it through until I have to make a final decision one way or the other (approx two years down the track), chances are we’ll abandon it, a decision made largely on the weight of having two sets of grandparents within a ~15 minute drive.

        It’s not just the raw help, either, it’s the cultural education, family bonding, etc.

      • kiwikarynMEMBER

        You could move overseas and hire a full time nanny, and it would still be cheaper than living in Sydney. (and if you get in quick, you could even hire one of Trump’s illegals for cheap).

      • @drsmithy
        Be careful with that whole Green-card approach because legally you owe US taxes if you hold a green-card irrespective of where you ultimately reside, From memory you’re taxable in the US for all global earnings up to 10 years after you surrender your Green-card.
        I know several very wealthy HK citizens that acquired Green cards during the whole 1997 return to China matter but ultimately decided to remain in HK, they latter discovered they owed many $M in US back taxes and penalties to a country that they never actually resided in.

      • The housing bubble should help. More people still living with their parents, means the grandparents of their children are close at hand to help.

      • Well looks like my brother might have to do just that, was looking at a house in Mordialoc Melbourne and it was listed at 720k he was willing to go to 800k at Auction but the seller has taken an offer before auction of 900k. haha… He’s pissed off.

        Looks like he’ll be under mum’s roof a bit longer..

  2. ResearchtimeMEMBER

    Bring back the baby bonus… transfer of the tax free threshold for the wife.

    We will breed ourselves out of existence. Then be over run by others.

    • From now on only child refugees will be imported to become the future Australians … No convicts please!

  3. Interesting position, however the map (below) highlights global fertility rates.
    https://en.wikipedia.org/wiki/File:Countriesbyfertilityrate.svg
    Should I assume that all these countries have low fertility because of housing affordability coupled with high levels of underemployment, all of which is politically convenient because the boomer generation profits from this arrangement.
    You don’t need to study the map for long to realize that if anything there an inverse relationship between Fertility rates and the security (financial, political, social, health) of the individual.
    Simply put: If we feel secure, we don’t breed.

    • OMG, this map is so misleading. What about the contraceptive pill, which are more than 50 years available in the developed world and not in Africa?


      • That’s kind of the point Smart is making isn’t it?

        Not really, as the point raised in the article relates to a single country where contraception is widely available and has been for all of those 50 years. Hence, if the difference between the TFR in Ethiopia and Australia is in any way explainable by the difference in access to contraception, it’s irrelevant for comparing Australia in 2011 with Australia in 2016 and Australia in 2026 as contracpetive access is virtually the same in all cases.

    • Locus of ControlMEMBER

      Yep, I agree it’s 95% this (“inverse relationship between Fertility rates and the security (financial, political, social, health) of the individual”) and not living costs that impact on fertility. And as that Credit Suisse millennial study demonstrated younger people these days prioritise, amongst other things, environmentalism and experiences first and foremost. Kids will undo your environmental ethos (let’s face it, humans are trashing the environment and more humans will only trash the environment more) and limit the number of experiences you can have (hard to venture off the beaten track when you’re knee deep in nappies and ‘The Wiggles’). It isn’t the 1950s any more, society doesn’t ostracise you if you don’t fit the mould (house, car, job, 2.5 kids) and people are learning to value other things, without feeling the need to leave anything behind them (i.e. kids).

    • Rates of ubranisation, contraceptive access and literacy have traditionally been the biggest drivers when transitioning from above replacement fertility to below. However, if you look at the 50 or so countries with a TFR below Australia’s you start seeing a lot of countries like Taiwan, Japan, South Korea and Hong Kong with reputations for current or recent housing affordability problems.

    • Righto [Not] Smart, so using your logic, young Australians should be breeding like rabbits because their financial security (housing, labour market, etc) has nose-dived? Yeah, that makes sense.

      • I think Smart has made a valid point, but missed the article’s. He’s eluding to lower birth rates, but the point being made is an abstaining from reproduction all together. I identify with the article in its entirety, this is my exact lived experience.

      • @Simon,

        Smart is seeing Simpson’s Paradox – the overall correlation between low security and high fertility is reversed in the subset of developed, high security nations due to other (hidden in terms of this analysis) factors.

      • I’m not seeing this paradox, but am willing to have it pointed out ?
        The relationship with birth rate and economic development isn’t new, but the circumstance where security and lack of independence from elder family members is. To imply a paradox would mean that the outcome is intuitively unexpected, but I do not see this to be the case….

      • Mate, honestly I’m not the one trying to bend the statistics to support my ideology.
        The numbers speak for themselves on this issue. There is no global conspiracy (in practically every developed country) to constrain birth rates by denying the next generation access to good jobs and adequate housing. Sorry mate but that dog don’t hunt.

      • drsmithyMEMBER

        I can’t see anyone suggesting it is a conspiracy (well, maybe some of the “cultural marxism”, “white genocide” nutters will), just an outcome.

      • kiwikarynMEMBER

        Well, from what I’ve seen people on welfare do breed like rabbits, because apparently the more kids you have the more money you get. The only solution to the “children living in poverty” statistics that are rolled out every election is long term contraception is a mandatory requirement in order to get a benefit.

    • drsmithyMEMBER

      There’s a distinction to be made between having no children and not having lots of children.

      Fertility rates generally line up with legal and social status of women and how easily they have access to/knowledge of contraceptives and abortion. Though in fairness those things have a tendency to correlate with “security”, especially when it’s being so broadly defined.

      But I reckon we could find demographics with high levels of “security” and relatively high birth rates due to social/cultural/educational factors without having to look too hard.

      • But I reckon we could find demographics with high levels of “security” and relatively high birth rates due to social/cultural/educational factors without having to look too hard

        Smart seems to use ‘high security’ as practically a synonym for ‘developed country’, in which case you’re going to find it very hard to find a country with ‘high security’ and high fertility.

      • drsmithyMEMBER

        Yep, but I reckon within those countries I can find relatively high/low birth rates.

        Compare various states of the US, for example. Or even different socio-economic groups within those states.

        But that’s the general fertility case. Specific to the “economic pressures are producing childless families” hypothesis, we’d expect to see relatively higher birth rates amongst high income families (say, top 5%) compared to the higher end of middle income families (say, top 80-95%), right ?

        There would be great difficulty in controlling for the other factors know to be influential, I reckon. 🙂

      • drsmithyMEMBER

        Another factor to look at would be average age when first child is born. Financial pressures would drive this up whereas “security” shouldn’t really impact it at all ?

      • You can control for those factors to some degree by taking a longitudinal approach – analysing a particular location repeatedly over time. Actually, iirc that analysis was done in the US over several years which included the GFC, with the finding that the spike in unemployment was strongly correlated with a drop in TFR – the counties with the biggest economic decline saw the largest drops in TFR.
        Similarly, I feel confident that you would at least see a some correlation between the time period over which TFR dropped in Taiwan or Japan, and increased difficulties affording housing on an average income.

        The difficulty with the explanation offered by Smart is that at the resolution available on his map, with only a handful of exceptions, high fertility countries are all African, so the list of ways those countries differ from Australia and the countries most similar to Australia is extensive, and meaningful comparison extremely difficult.


        Financial pressures would drive this up whereas “security” shouldn’t really impact it at all ?

        On the financial side that probably is expected, but on the security side, I don’t know without a clearer notion of what ‘security’ might mean.

      • But I reckon we could find demographics with high levels of “security” and relatively high birth rates due to social/cultural/educational factors without having to look too hard.
        Of course we could, I’m sure I’m not the only one who has rich friends that have 5 and 6 kids, I’m also not the only one that sometimes wonders about how many kids that Middle Eastern family plans to have.
        By the same token I have many Asian friends who honestly believe that one child is enough for any family. They equate having more than one child with being selfish, or in my case extremely selfish. Some good friends will even ask with a sort of wonderment, why am I SO selfish?
        For me the whole issue is akin to the Lemmings marching of a cliff conundrum, which Lemmings is it that lead the march and which Lemmings are kind-of slow to get the message, arrive late to the event and conclude that the job is already done.
        Personally, if the matter interested me, I’d look much closer at individual human psychology of this issue before trying to account for this effect through environmental conditioning statistics.

      • You can control for those factors to some degree by taking a longitudinal approach – analysing a particular location repeatedly over time.
        I’ve got no problem with this approach however from a math perspective there are very few functions where the derivative is the same as the Function. The economic factors that impact d(TFR)/dt are probably not the same as those that influence absolute TFR. Integrating changes in the derivatives is also a very dangerous way to calculate the original function, Noise exist in all manner of measurements and Noise is often non-brownian.

      • @Smart,

        I’m not sure what you are talking about, and I’m not convinced you are either.
        Extending regression modelling to include mixed effects models, of which longitudinal analysis is an example is well established, and no attempt to estimate a differentiable function for TFR is implied by its use.

    • Children have economic value in poor countries that don’t enforce child labour or compulsory education laws, and this is especially true in rural areas where they can be put to work on the land. Furthermore they can provide some security in old age where people cannot trust the state to give them a pension or the financial system to look after their savings.

      The situation is entirely different in developed countries where children are expensive. As many here have pointed out, economic insecurity and high housing costs are poison to fertility rates. I would add high density, into which many of us are being forced by the high housing costs and scarcity of jobs outside a few big cities. The demographer Joel Kotkin has said that high density is a more effective means of bringing down fertility rates than China’s one child policy. Fertility rates in a developed country are also much lower in big cities than in the country as a whole.

      http://www.newgeography.com/content/004496-urbanist-goals-will-mean-fewer-children-more-seniors-needing-government-help

      See also the maps in this article

      https://jaymans.wordpress.com/2012/08/23/another-tale-of-two-maps/


      • Fertility rates in a developed country are also much lower in big cities than in the country as a whole

        No different for developing nations – in Ethiopia, with national TFR of around 4.5, the capital, Addis Ababa’s TFR has been estimated at around 1.7 (varies a little with city borders used). Similarly, in India, the TFR of individual states varies widely with urbanisation rate being cited as one of the key drivers.

    • There is also something of a fallacy in the article conclusion around the undefined ‘immigration’ that is equated with the ‘nebulous NOM’:
      ‘The saddest part is that policymakers’ likely response will be to ramp-up immigration even further in order to inject younger workers into the economy and ‘solve’ the fake ageing population problem (even though immigration is totally ineffective in this regard)’

      UN expanded definition of the NOM in 2006, as used by Oz, to include those in Oz for 12/16+ months thus including temporary residents and inflating the headline number.

      The majority of these so called ‘immigrants’ are net budget and economic contributors with no possibility of permanent residency eg students, 2nd year backpackers, 457s etc. This means increasing numbers of oldies can be supported, with tinkering of entitlements, without crashing budgets now and in future.

      Maybe MB needs a statistics and fact checker on visa, immigration and population data?

      • A reasonable criticism in relation to a single years data but over , say, a ten year period, the NOM would capture the temps going home.

      • The NOM still doesn’t mean anything in relation to long term population and permanent immigration according to the criticism of NOM etc., except that it’s a snapshot of movements (ignoring the increased numbers of ageing and longevity of citizens and PRs who create growth but not included in NOM)? Out of those who have been included in the NOM the majority leave and small minority would have been eligible for PR, if they chose to (vs. suggestion all are eligible and expanding the meaning of ‘immigrant’ to include temps, even if they have no plan to apply for PR).

        Any success in attracting net contributors who are caught up in the NOM e.g. students, backpackers and 457s (lacking many if not most rights) to support the tax base, young or old Australians and PRs, is deemed to be a failure because of a temporary rise or spike in the estimated resident population, then claimed they are an ‘unsustainable’ weight on the nation and environment (even if most live in shared housing, flats, units and do not own cars).

        It’s more about confecting alarm and raising emotions on all things about identity, immigration and population growth, while claiming it’s in the interest of environmental ‘sustainability’.

        If it is a problem, that MB has highlighted constantly for years, then why is there not a solution vs. glib one liners of stopping ‘immigration’? See Brexit and the confusion over the NOM targets, but that’s the point isn’t it, it’s a cynical political and societal wedge issue inserted by the nativist lobby.

        In future, when baby boomers start popping their clogs around 2025, this will seriously impact the citizen and PR component of population, while global population nears its peak, then a temporary pool of net contributors becomes even more important if services are to be maintained by govt. funding.

        I guess MB et al. do not think governments should be involved in health care and social security if it’s not considered important to support the oldies, because allegedly (temporary) ‘immigrants’ are both using and abusing govt. services, when in fact those ‘immigrants’ support the services?

        Like Brexit and Trump, another way to have people focus upon beliefs and values, then vote against their own interests…..

  4. This is another reason our government population projections are flawed – without the bubble ending , which will be almost certainly associated with a big drop in NOM, our TFR is going to get closer and closer to Taiwan or Hong Kong TFR.

  5. They will just import consumers anyway.

    Kids should play the long game and stay in the bedroom anyway, the alternative is debt slavery or lining the pockets of investor scum. If you’re making 80k you could be banking 100k every 3 years while still doing two SE Asian debauchery trips a year to get your rocks off.

    Liquidity will eventually be king.

    • ErmingtonPlumbingMEMBER

      “If you’re making 80k you could be banking 100k every 3 years while still doing two SE Asian debauchery trips a year to get your rocks off.”

      Yes,…I vaguely remember Fran Kelly,…or was it or Geraldine Doogue?,… making this very point on ABC Radio the other day.
      😉

    • Fucking the people who live here (especially the women’s) is basically how you get more babies.

      That’s said – dropping kids at primary school some mornings this year I did a headcount and observed that <50% of kids in each class are "white". Found that to be a bit Strange because it's quite unrepresentative of the broader population.

      Either immigrants are more prolific breeders or there is a bit of a bias in the suburb involved… go figure.

      • Most likely both factors are at play.
        In my opinion, more and more men are also waking up to the fact that marriage/de-facto relationships and kids is highly biased in favor of the mother should she wake up one day decide that she is not happy and wants a divorce.
        For more and more men; “the juice is just not worth the squeeze”.

  6. But all these articles miss what’s probably the leading factor.. there are more childless households, because after the kids move out, the remaining adults will become a childless household for longer and longer, because people live longer.

  7. McPaddyMEMBER

    When TSHTF you’ll see low fertility for another reason too. Housing affordability is back, but all those savvy couples who broke their backs to get on the housing ladder are stuck in a debt hole inside a “starter home”. Oh well, just the one kid then.

  8. MichaelMEMBER

    Although I can afford to have multiple children, I know what the current future for them in Australia is (nothing).
    We will be leaving for good to a land with more opportunity.

    • Seriously !?? Such a defeatist mentality… You have no idea how good you have it and how good your kids will have it compared to the other 7 billion humans on this planet

      • Unless he’s parachuting into a highly paid job somewhere in the US or Norway I can’t imagine where he thinks that things are “better”. The real estate mess is worldwide.

  9. I think a lot of whites think they will be automatically on top of these new people. They are in for a rude shock. Well some of them will be. Better have some good mates from the private schools.

  10. Anyone who puts their life on hold because they think they have to get rich first is going to live a very unsatisfactory life.

    Better boost Lifeline funding.

  11. Really not giving the government enough credit for what is obviously a long plan as part of Gonski 2.0.
    We have a problem with school funding especially in public schools, a little Malthusian tightening and the poor slow breeding taking pressure of the public system. The effect is weaker on more affluent families which is fine because the funding shortfall is less for the private schools.
    Soon have that budget balanced.

  12. – Disagree. Why ALWAYS blame the government for EVERY problem ?? The corporate sector ALSO can be blamed for this development. By increasing productivity the corporate sector is UNDERMINING demand.