In early 2022, a survey asked 4,000 Americans how much they’d pay to avoid a pandemic mask mandate for three months. The wide range of responses was striking. Over half said they wouldn’t pay anything, but the average response was still $525. Remarkably, that’s because almost 1 per cent of the US population said they’d be willing to pay over $5,000, while parents, on average, claimed they’d part with $800 to exempt their children from wearing masks at school.

Now talk is cheap, as they say, especially given there was no real-world decision being made here. Yet, these results do highlight a broader economic truth: value is highly subjective. The worth we attach to aspects of our lives — like our kids’ school experience or having our own faces uncovered — varies significantly across the population.

The same logic applies to our family fertility decisions. Today, policymakers and commentators are worried about declining birth rates. The UK’s total fertility rate has plummeted from 2.95 in 1964 to 1.49 in 2022, well below the replacement level — a trend observed across most developed countries.

Fewer babies mean pay-as-you-go welfare states will face increasing financial strain, and many economists worry that fewer people will mean fewer groundbreaking ideas that drive economic growth. In response, there’s been a pro-natalist push for government baby bonuses, tax breaks, or subsidies for childcare or other costs to make child-rearing more affordable.

The problem is that these policies typically yield tiny results. Nordic welfare states still grapple with below-replacement birthrates despite numerous “family-friendly” policies. Childcare subsidies haven’t meaningfully shifted the dial here. Australia’s former baby bonus, worth thousands of pounds, caused only a temporary birth spike and the country’s fertility rate is now back around 1.6. The main effect of financial incentives seems to be the “re-timing” of births, where those already planning to have children do so sooner to obtain the cash benefits.

No one denies that monetary incentives have some effect. The scale of these interventions, though, is far from enough to fully reverse population decline, nor even resist the social and economic forces in the opposite direction. To raise fertility above the magical 2.1 level, you’d probably need to offer some families hundreds of thousands of pounds, which would result in sharply increased taxes or government debt, putting unbearable pressure on the private economy.

As with our mask example, many couples simply place an incredibly high value on what they would have to give up — the “opportunity cost” of having (more) children. Women, especially, sacrifice a lot to have children, beyond the direct costs of “affording” them. It’s the sleepless nights, suspended careers, forgone promotions, lost hobby time, and physical strain. These costs are real, and as social and governmental barriers to female ambition have eased, they have increased.

A few thousand quid from a tax break or subsidy is neither here nor there against the prospect of, say, sacrificing a career you’ve longed for since school. While many parents may regret starting a family too late, their revealed preferences at the time show they judge the benefits of having more children insufficient compared to these costs.

This judgment, however, is clearly highly subjective. Catherine Pakaluk, a political economist at the Catholic University of America in Washington DC, interviewed a host of mothers with five or more kids for her excellent book Hannah’s Children. Babies weren’t any more “affordable” for these families relative to others. What drove their large family choices was the belief that the joy and meaning derived from more kids far exceeded the benefits of the path sacrificed.

As she concludes, such “reasons of the heart” can never be imparted through a tax credit or cheap childcare. They stem from fundamentally different conceptions about what makes a fulfilling life. While modest taxes and subsidies might nudge our cigarette or energy consumption, they won’t alter many life-changing decisions about having kids.