Economist Stephanie Fabri: Addressing Malta’s fertility rate ‘extremely difficult’ and should be top national priority

Low birth rates have become one of the most pressing demographic issues in the European Union. Fertility rates have dropped below replacement levels, raising the alarm on ageing populations, economic sustainability, and the long-term viability of social welfare systems.

Here in Malta, we are experiencing one of the lowest fertility rates in the EU, and the uphill battle is increasingly steep.

“It will be extremely difficult to reverse the trend because this somewhat became a social norm.  Addressing fertility rates should become one of our national priorities,” Stephanie Fabri, economist, tells MaltaCEOs.mt. 

The decline in birth rates across Europe and Malta, Dr Fabri explains, is largely driven by economic and labor market instability. Economic uncertainty, high youth unemployment, and the rising cost of living discourage young couples from having children. 

“Financial instability, particularly in Southern Europe, results in delayed family planning as young adults prioritise securing stable employment before starting a family. In Malta, the financial burden of raising a child remains a key factor affecting fertility rates, alongside high living costs and economic constraints,” she says.

Another critical challenge is the difficulty of balancing work and family life. 

“In many European countries, parents struggle to maintain careers while raising children due to limited parental leave policies and insufficient childcare support. 

Women, in particular, bear a disproportionate share of childcare and domestic responsibilities, which hinders their professional growth. As a result, many delay childbirth or choose to have fewer children. Malta faces similar issues, with calls for more robust work-life balance policies to ease the burden on parents,” the economist explains. 

Cultural and social shifts have also played a role in the decline of fertility rates. 

Contemporary societies in Europe have increasingly prioritised career advancement, personal fulfilment, and financial stability over early parenthood. Changing gender roles and declining rates of marriage also lead to smaller families and declined childbearing. 

Changing gender roles and declining marriage rates have further contributed to the trend of delayed childbearing and smaller families. 

“Malta is no exception to these societal changes, as many young adults opt to focus on professional aspirations before considering parenthood,” Dr Fabri says.

Many women postpone having children until later in life, which can lead to lower total fertility rates due to biological constraints or changing life circumstances. This pattern is evident in Malta, she explained, where young professionals are increasingly prioritising their careers before starting families.

Another factor is housing and financial constraints that further complicate family planning decisions. 

High property prices and limited access to affordable housing discourage young couples from starting families. Countries like Germany and the Netherlands have seen declining birth rates due to financial stress, and Malta faces similar challenges. The country’s high property prices and rising cost of living create barriers to parenthood, making it difficult for couples to secure a stable home before having children.

Addressing low fertility rates through policy

Several EU countries, including Malta, have introduced policies aimed at supporting families.  The island could take notes from its European counterparts when taking the issue. 

“France has been one of the most successful in implementing pro-natalist policies, offering generous child allowances, tax benefits, and childcare subsidies. The French Government provides direct financial aid to families, along with incentives for working parents and financial bonuses for families with multiple children. 

Germany has also introduced measures such as parental leave reforms and financial incentives.

“This includes the Elterngeld program, which compensates parents for lost income during parental leave. Similarly, Hungary has taken an aggressive approach by offering interest-free loans for married couples, mortgage forgiveness for families with multiple children, and extended maternity leave benefits.”

In Malta, the Government has introduced financial incentives to encourage childbirth. 

Dr Fabri mentioned that the 2025 national budget included an increase in children’s allowances, providing an additional €250 per child annually to benefit approximately 10,500 families. Birth and adoption bonuses have also been adjusted, with families receiving €500 for the first child, €1,000 for the second, and €1,500 for the third and beyond. Additionally, a new tax rate has been proposed for parents with multiple children as part of a broader strategy to combat declining fertility rates.

However, reversing this trend will be “extremely difficult” because it has become a social norm. 

“Changing social norms and attitudes toward childbearing have also been a focus of policy efforts. Scandinavian countries have normalised dual-income households with equally shared parental responsibilities, reducing the career sacrifices often made by women. In Malta, Prime Minister Robert Abela has emphasised the need for targeted incentives to address demographic challenges.

However, demographic projections indicate that if the country’s birth rates continue to decline, Malta’s native population could shrink from 406,000 to 336,000 within 25 years, with one-third of the population being aged 65 or older. This stark projection highlights the urgent need for effective measures to support family growth,” she says.

Beyond financial incentives, work-life balance policies have been a key focus in several EU nations. Nordic countries, such as Sweden, Norway, and Denmark, have successfully implemented extensive parental leave programs and high-quality childcare services. 

“Sweden, for instance, provides 480 days of paid parental leave, which can be shared between parents to encourage greater paternal involvement in childcare. France has also introduced affordable daycare options and incentives for shared parental responsibilities, while Germany and the Netherlands promote flexible working arrangements, such as part-time and remote work, to help parents balance careers and family life,” Dr Fabri adds.

In Malta, advocacy groups such as the Malta Women’s Lobby argue that financial incentives alone will not be enough to reverse declining birth rates. They emphasise the need for more comprehensive policies, including accessible childcare, parental leave reforms, and initiatives that foster a better work-life balance for families.

Housing and employment support measures have also been implemented in various European countries to address financial concerns related to raising children. Italy and Spain have introduced housing subsidies and tax deductions for families, while Germany has focused on improving employment security for young workers. Austria has prioritised affordable housing programs by providing low-interest mortgage options and rent subsidies. Malta, however, continues to face challenges in this area, as high property prices and limited access to affordable housing make it difficult for young families to establish stable living conditions suitable for raising children.

Addressing low fertility rates in the EU and Malta requires a comprehensive approach that includes economic security, work-life balance initiatives, and social incentives. While policies implemented in France and Nordic countries have shown positive results, other nations, including Malta, still face significant challenges. 

“The introduction of financial incentives and proposed tax reforms in Malta marks an important step toward encouraging childbirth. However, experts argue that a broader strategy that includes better employment security, housing support, and shifts in societal attitudes toward family life is necessary. Moving forward, a coordinated European and national approach that integrates financial, employment, and social policies may be the key to reversing declining birth rates and ensuring demographic sustainability,” she finishes.