Fertility is falling, but babies won’t save the economy

Four-child families are a relic of Malta’s past. Today, most couples stop at one child, not for lack of desire but because of financial strain. This falling fertility is reshaping Malta’s labour market, fuelling reliance on foreign workers and straining pensions. But experts say the real issue isn’t ‘ethnic extinction’ but outdated policies that pile most of the caregiving burden on women.  

So, if more babies are not the answer, what is? Scientists, sociologists and economists suggest that Malta needs to rethink both its family policies and its economic strategy, from community childcare hubs and parental co-operatives to serious investment in technology and productivity. 

The Maltese want kids, it’s just not easy to have them 

Most Maltese women do want children. A study commissioned by NCPE found that over 63% of respondents would like to have two kids, although most settle for just one. When asked what would help them have the number of children they want, almost half cited resolving financial issues.  

Working life is not incompatible with family care. Anna Borg, an associate professor who co-wrote the report, points out that there are countries with higher employment rates than Malta that also have higher fertility rates. “We often treat work and family as two separate, competing spheres, forcing women into a false choice between the two. That’s problematic. There are countries where it’s far easier to combine both, where women have the children, they desire and maintain their careers.” 

Borg points to several issues that discourage women from family life. Firstly, the caregiving burden still falls on Maltese women. This is made worse by Malta’s leave system, which forces women back to work after just 18 weeks. Parental leave is also complicated and discouraging rather than supportive.  

Then there’s the cost of living and housing. “The finance minister said that families who manage to have a second child tend to earn around €8,000 more, which highlights the financial strain many feel,” she says. But money is not the silver bullet. Some countries tried financial incentives without addressing care gaps. “It doesn’t work,” she says.  

This new messaging on fertility comes with its contradictions. Aleksandar Dimitrijevic, founder of Men Against Violence, says this new pressure is an unfair expectation for women. Moreover, two years ago half the country opposed abortion rights legislation that safeguards the health of the mother during pregnancy complications. “Are we seriously telling women that we need them to get pregnant more often and keep a straight face?” 

Dimitrijevic insists that women need to be seen as more than a utility that can be used and deployed according to the needs of the economy. “Politicians and policy makers should stop trying to come up with a cost vs benefit formula that would bribe women into having more children. Rather, they should start with talking to women and letting their voices be heard.” 

READ ALSO | ‘Ethnic extinction’ is a far-fetched exaggeration. Here’s why.

Why ethnography matters in shaping family policy 

Better leave is a fine solution, but the government can be more ambitious and experimental in its policies. Rachael Scicluna, an urban anthropologist, says a bottom-up approach is needed. “This means supporting resident-led initiatives that explore what people actually value in relation to family life, and co-designing solutions that resonate with their everyday experiences. Rather than telling families what they should look like, we need to build policies and community programmes that support the lives people aspire to live.” 

There are plenty of possibilities. Her proposals range from converting unused public buildings into childcare hubs, to subsidised ‘starter’ homes, dedicated paternity leave, and even intergenerational childcare by trained ‘grand friends’. 

“Underlying all of these proposals is the conviction that policies must be evaluated not only through statistics but through ethnography. Numbers may show us fertility rates, but ethnography reveals why people make certain choices, what they fear, and what they hope for.” 

In the immediate-term, Scicluna recommends a six- to 12-month ethnographic study to map out the hopes and barriers facing prospective parents. From there, one or two pilot initiatives could be launched with a multi-stakeholder working group including government, employers, NGOs and residents themselves.  

Increased fertility will not fix the economy, but productivity might 

Falling fertility rates can be a real problem for the economy. It reduces the labour force and puts pressure on public spending towards pensions. So far, policymakers have compensated for this by bringing foreign workers to fill in the gaps. 

However, economist Philip Von Brockdorff warns that the labour market is now heavily reliant on foreign workers. Even public spending on pensions can only be sustained if immigration remains at the heart of Malta’s economic strategy, and possibly through an increase in retirement age. “The importance of foreign workers to sustain a rising public sector expenditure cannot be understated.”  

Godfrey Baldacchino, a sociologist, points out that Malta is one of the few European countries that does not have a mainstream anti-immigrant party, despite it being a national concern. This is because everyone benefits from immigration under the current economic model.  

“We have ready hands to perform unsavoury work, ready clients to rent modest accommodation, ready employees that accept the wage rates offered. This economic model can persist, but it also comes with low labour productivity.” 

Economists have long warned that Malta needs to improve on productivity. Von Brockdorff says that even with the current fertility rate and immigration levels, Malta will still need to increase productivity through heavy investment in AI and advanced technology to register real growth rates of 4-5%.  

“The returns from such investment are not automatic and will take time to materialise,” Von Brockdorff said. “In the meantime, we will still need to rely on migrant workers to make up for both the falling fertility rate and the time taken to reap the benefits of investment and productivity.” 

Baldacchino agrees that Malta can only move up the value chain by investing more in capital and labour-replacing technology. “Imagine, for example, replacing all ride-hailing drivers with driverless cars? Investing in more robotisation in manufacturing? Unleashing AI in the service sector? There are no solid incentives in this direction so far. Instead, engaging foreign workers is the line of least resistance.”  

READ ALSO | Low fertility rate: Maybe the scholastic calendar needs changing

A cultural shift that money can’t reverse 

Malta could go down the route of implementing more extreme pro-natalist policies. Policymakers could throw money at the problem by increasing the children’s allowance or widening tax bands for parents. But no amount of money can reverse the cultural shift that has taken place towards family life.  

“At the end of the day, this is a choice made by couples or individuals,” Von Brockdorff said. “I cannot see us going back to fertility rates we had 30 years ago.” 

Dimitrijevic agrees, and says that policymakers should try to build an economic system around it. “Our economy is profit-oriented and not focused on the wellbeing of families or individuals. The treatment of women is a reflection of that.”