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Business lobby calls for govt action to boost Finland's birth rate

A continued low birth rate will affect the government's ability to bankroll social services and pensions in the future.

Vauvan vaippaa vaihdetaan.
Image: AOP

A Finnish employers’ organisation wants the government to make political decisions that would encourage families in Finland to have children. It is the latest salvo in the discourse over the country’s declining birth rate, which policy makers warn will have a knock-on effect on the labour force, tax revenues and the ability to fund social services and pensions.

Ilkka Oksala, a director for work and social affairs with the business lobby Confederation of Finnish Industries or EK, said that the right policies can influence the national birth rate.

"It is clear that Finnish families will decide on having children. However we can use social policy decisions to ensure that as many families as possible decide to raise children. We have historical evidence to prove that political decisions matter to families," Oksala commented.

In 1973, the birth rate fell to nearly the same level as 2019, when Finland registered what was then the lowest number of births in recorded history. However after 1973, the birth rate began to rise after the government of the day introduced a law that obligated municipalities to provide daycare for pre-school aged children.

Story continues after graphic.

Births per mother 1960-2018
Image: Lasse Isokangas / Yle

In retrospect, Finland did not have many other options at the time. The country was urbanising, more women were entering the labour force and their children needed care. Daycares made it easier for mothers to hold down jobs.

This time around, the EK wants to see a similar kind of behavioural shift prompted by government policy. However Oksala noted that unlike the 70s, no single sweeping measure will be enough.

"Now it’s not even entirely clear what’s behind the low birth rate. That’s why we need several measures. However I think it’s clear that what matters is how people can combine working life and parenthood," he noted.

The EK director suggested that issues such as improving access to daycare, reducing daycare fees and parental leave reforms could influence the birth rate.

Rising numbers on the fence about starting families

Many of the researchers and politicians engaged in hand-wringing over the low birth rate have been concerned about Finland’s future ability to fund welfare services and pensions.

The Finnish Centre for Pensions has calculated that Finland would either have to boost the employment rate to 90 percent, increase work-based immigration by a net figure of 30,000 per year or restore the birth rate to levels last seen in 2012, if a single measure is to be applied to maintain a sustainable funding level for the pension system.

According to Oksala, while each of the measures outlined by the pensions centre would address the issue, in reality all might be needed.

Anna Rotkirch, a research professor with the Family Federation of Finland (Väestöliitto), said there is no easy way to boost the number of births in the country.

"Research has shown that there is a link between functional early years education and daycare and a higher number of births. But we already have those systems," she noted.

In addition to these services, some municipalities have introduced so-called "baby bonuses", service vouchers and other financial incentives. These perks appear to have mostly influenced the timing of family additions, a factor that Rotkirch said seems to have become more important to would-be parents.

"We are now in a situation where children are being born when parents are quite mature. So timing is the most essential factor. The question is whether or not to have kids at all," she remarked.

Recent statistics indicate that the proportion of people who are undecided about having children has grown; conversely the number of adults who are certain about having a family has declined.

According to Rotkirch, Finland now needs to try every means possible to encourage adults who are on the fence about having children – if it really wants a baby bonanza.

Having children a deeply personal issue

National discourse about Finland’s flagging birth rate has sometimes veered into choppy waters. Two years ago, ex- Prime Minister Antti Rinne floated the idea of a national childbirth campaign at the Social Democratic Party’s annual summer congress, ruffling feathers in every direction.

At the time long-serving SDP Europarliamentarian Liisa Jaakonsaari took to Twitter to declare that Rinne’s choice of language brought to mind national socialism and the Third Reich.

Ilkka Kaukoranta, an economist who specialises in parental leave reform for the largest blue-collar trade union confederation the SAK, said that the issue of having children is not well suited to political control.

"Trying to have children or not is a deeply personal matter. Whereas it’s easy to regulate the obligation to accept employment in labour policy for example, the same kinds of measures are problematic in population policy from the human rights perspective," he pointed out.

The union economist noted that the main goals of family leave reform are not about childbearing.

"The main objectives of family leave reform are gender equality, improving equality among different kinds of families and harmonising work and family life. Maximising birth rates are not part of that,” he added.

It will be equally challenging for Finland to introduce other measures to continue to bankroll social services and the pensions system.

Employment can only grow so much because it applies to residents between the ages of 15 and 64. Some people at the younger end of the spectrum will need to stay in school for several years if they are to become much-needed highly-skilled members of the workforce.

The third option on the table is work-based immigration, an issue that has proven to be a hot potato for decision makers.

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