A Return To Boom And Bust In Births

10th November 2021

How birth cycles will affect public spending pressures over the coming decade.

The demographic impact of the Baby Boomer generation on public spending is frequently discussed as they move out of work and into retirement, but the most recent birth cycle - in which births hit a low point in 2002, a high point in 2012, and have been declining since - is having profound impacts on the education system. For example, pressure for pre-school places looks set to fall over the next few years, as the number of 2-4-year-olds falls by 7 per cent by 2022. But pressures in the post-16 education system are likely to grow, with the number of 16-18-year-olds set to increase by 15 per cent by 2025. Baby booms are not always bad news, though: the baby boom in the first decade of this century means the country now has an opportunity to shape the skills profile of a large cohort of new workers to match the sectors that will be growing in future. But to harness these changes for the better, it is vital that we better understand the implications of demographic changes, and particularly so as the Government confirms public spending plans for the next three years.

What has happened to births over time?
The long-run decline in births over the past few decades - part of the second demographic transition - is a phenomenon common to many developed economies, with the average number of births per woman in the OECD having fallen from 2.8 in 1970 to 1.6 in 2019. Over the same time frame, the UK has seen a similar development, with average births per woman falling from 2.4 to 1.6. This is unsurprising: over the longer term, spending longer in education, shifting gender norms, greater career opportunities for women, and advances in health care have all encouraged families to have fewer children, and to have them later in life.

But this gradual decline in births in the UK has not been smooth, and there have in fact been considerable cycles of boom and bust. The most well-known of these is the boom in births immediately following the end of the Second World War, the generation we now call the Baby Boomers. But the UK has seen two more birth cycles, albeit less dramatic, since then, as shown in Figure 1. The first of these involved a peak in births in 1990, and the second one peaked in 2012. Interestingly, although we cannot yet tell whether the recent cycle of boom and bust in births has completed, we can see that it could be slightly bigger than the one preceding it: the 2012 peak had 10,000 more babies born than in the previous peak in 1980 although slightly more children were still born in 2020 than at the previous low-point in 2002.

This article is from The Resolution Foundation.
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