The FINANCIAL -- “Sex and the City” takes on a new meaning as research indicates: while urbanization has historically been linked to lower birth rates, research is dispelling the myth of cities as fertility traps. A recent study “Bigger cities, more babies?” from Allianz International Pensions, the insurer’s demographics and pensions think tank, found that the birth rate in 41 major European and US cities is on average actually 7 percent higher than the national average of the respective country.
“Surprisingly, cities with some of the highest living and housing expenses also show an excess birth rate compared to the national average,” said Brigitte Miksa, head of International Pensions. These include Oslo (+16 percent), Copenhagen (+14 percent), Stockholm (+13 percent), London (+8 percent), New York City (+5 percent) and Munich (+5 percent). This recent evidence indicating that cities in developed countries are experiencing a “mini baby boom” is contrary to the global trend of dramatically decreasing fertility rates.
“Better job opportunities, ‘Brangelina-effect’ and easier access to childcare”
Cities experienced unprecedented growth in recent decades (compare: “The megacity state: the world’s biggest cities shaping our future”). Some demographers believe that the conditions that draw people to cities, such as increased access to education, better employment for women and family planning options, could also be linked to the global decline of fertility rates. But some of them might also be a reason for just the opposite.
Miksa: "According to our research, drivers for the fertility increase in some cities include better opportunities for jobs that offer work-life balance and more comprehensive infrastructure with easier access to childcare. People in cities also tend to be more highly educated and therefore generally earn more money, which can offset the high costs of housing. There might also be shifting attitudes towards parenthood among affluent couples.” What the experts also observe in their data is the so-called “Brangelina effect”: Children tend to be status symbols and their parents are happy to show that they can afford many of them. This phenomenon is termed after actors Angelina Jolie and Brad Pitt, who have six children.
Still no cure-all for issues faced by aging societies
In this study of fertility in cities in Europe and the United States, birth rates were calculated and compared with national birthrates.* The list studied includes European capitals and cities with more than one million inhabitants. Researchers found that the higher fertility pattern transcends borders: Lisbon (+50 percent), Bratislava (+31 percent) and Birmingham (+17 percent) lead the list of cities studied in terms of excess birth rate. In the US, the adjusted birth rate for New York City was 5 percent higher compared with the national average; in Chicago it was 3 percent, and in Dallas 17 percent.
However, the Allianz researchers also caution that while a city baby boom is a demographic plus, it isn’t a panacea for the issues faced by aging societies. Of the cities surveyed, only Dallas and Birmingham have fertility rates of 2.1 children per woman, the number considered necessary for one generation to replace itself without immigration. Five other cities – Brussels, Stockholm, Oslo, London and New York City – have fertility levels just below the replacement rate. What this means, according to Miksa, is that “countries will still need to find other ways to sustain their populations and fund their public services and pensions systems.”
What does this mean for Allianz?
The trend might trigger a need for additional solutions that support young parents in urban areas. Although not part of the survey, Turkey with its so-called “Allianz-nurse-service” serves as an example for what insurance companies can do. Young parents who are insured with Allianz Turkey get a visit from an Allianz nurse who provides them with advice free of charge: for instance, “What does the baby need? What can we do to help?”. One of the Turkish employees who had become a father himself came up with the idea after speaking to a customer on the phone. The young mother on the other end of the phone was describing some of the problems she was encountering in her day-to-day life and he could see exactly where she was coming from. “I don't understand my insurance policy. What exactly do I have to do next?” The phone call soon turned into a very personal discussion and the direct input from the customer ended up giving rise to the Allianz baby concept.