Fertility rate is the victim of our economic success

By Dr Ovidiu Tierean, Senior Advisor, PKF Malta

Everywhere in Europe, fertility rates are decreasing.  None of the European countries has a fertility rate above the replacement rate of 2.1 children per woman. The situation is as bad as everywhere on our sunny shores and this article discussed some of the causes.

In the two decades since joining the European Union in 2004, Malta has undergone an economic transformation that few could have predicted.  Once known for its sunny climate and tourism, the island has become a magnet for international investment, particularly in the igaming, banking and financial services sectors.  By establishing itself as a low-tax, business-friendly jurisdiction, Malta carved out a niche that attracted foreign direct investment (FDI), created thousands of jobs for locals and expats, and has since elevated its standard of living.  Let me remind everyone that Malta’s GDP per capita in 2010 was 87% of EU average, whereas in 2024 it sat at 112% EU average.  But with this economic success has come an unintended social consequence: a dramatic decline in fertility.

Shortly after EU accession, Malta’s female labour force participation rate stood at just 34.5%. Over the following years, demand for workers - especially in skilled sectors soared. With limited local male labour reserves and high job vacancy rates, women became central to filling the gap.

By 2013, female participation had grown to 47%, and by 2018 it jumped to 64%. In 2020, Malta surpassed the EU average and hasn’t looked back.  As of 2023, 73.6% of Maltese women aged 20–64 were engaged in paid employment, compared to the EU average of 69.4%.

This influx of women into the workforce did not happen in a vacuum. It was driven by structural policies like free childcare, introduced in 2014, and labour activation strategies that encouraged both local and foreign women to enter employment. These were lauded as landmark social policies, and many may consider they were. But they also helped redefine what success looks like for Maltese women: increasingly, the answer was a career, not a family.

The decline in fertility

As female participation in the economy surged, the fertility rate fell, almost in parallel. In 2004, the average number of children per Maltese woman was 1.40.  By 2023, it had fallen to 1.06, one of the lowest in Europe, and far below the replacement rate of 2.1.

This is not a coincidence. Across the developed world, research consistently shows a correlation between higher levels of female employment and lower fertility rates. In Malta, this effect has been magnified by the fast pace of economic liberalisation, and the lack of comprehensive structures to support work-family reconciliation beyond early childcare. For Malta, the correlation between female participation rate and fertility rate stands at 86%!

The igaming and financial services sectors have provided a steady pipeline of high-paying jobs for both locals and expatriates.  But these industries are demanding, competitive, and often built on long hours and intense schedules.  The pressure to pursue higher education and career advancement, especially among women, has reshaped personal timelines.  Marriage is postponed, and childbearing is increasingly delayed, if it happens at all.

According to data from the early 2000s, the average age of a first marriage for Maltese women was around 27.3 years.  By 2011, this had risen to 29.2, and the upward trend has continued. Today, many women enter their 30s prioritising economic stability over family formation.

Another component of Malta’s economic model is its growing dependence on foreign labour. From 2017 to 2022, the proportion of non-EU nationals in the workforce tripled from 6% to 18%, while the share of Maltese workers declined from 81% to 70%.  Sectors such as remote gaming, hospitality, and construction are now majority foreign staffed.

This demographic shift has further blurred the national fertility profile. Foreign women in Malta may have different fertility behaviours, but the overall trend remains downward.

To its credit, Malta’s government has implemented some of the most effective labour market policies in the EU, particularly regarding female labour activation. Childcare services, tax incentives and education have all played a role. Yet, as Jobsplus data suggests, structural inequalities persist. Part-time employment, which offers better flexibility for mothers, has decreased in Malta and now sits below the EU average.  The gender pay gap, though smaller than in many EU countries, still influences life choices.  And crucially, women in certain age groups remain underrepresented in employment statistics.

What lies ahead?

Malta’s economic success has unlocked new possibilities, especially for women, but it has also intensified the tension between career ambitions and family life.  The challenge now is to make work and family truly compatible.  A sustainable society requires a more holistic approach that values both economic and demographic resilience.

To support women who wish to have children without sacrificing their careers, the government must suggest more comprehensive family-friendly policies. This includes expanding access to subsidised, high-quality childcare, particularly for infants under the age of three, and extending paid parental leave with incentives for fathers to participate. Employers should also be encouraged or required to offer flexible hours and remote working options, helping parents better juggle professional and family responsibilities.

The high cost of education and housing continues to delay family formation.  Introducing financial grants tied to early childbearing, before the age of 30, could help reduce the economic barriers young couples face.  Likewise, programs that support early independent living, including housing subsidies and relationship education, can empower couples to start families earlier, without compromising financial stability.

Cultural shifts are just as essential.  Combating workplace discrimination against mothers and enforcing equitable hiring and promotion practices will give women greater confidence to pursue both family and career.  Leadership mentorships and more visibility of women balancing high-profile careers and family life will further reinforce the message: professional success and parenthood are not mutually exclusive.

As policymakers look to the future, the question must no longer be just how to get more women into work, but how to make that work compatible with family aspirations, ageing demographics, and national sustainability.  Because in today’s Malta, the fertility rate isn’t just a statistic, it’s a consequence of economic progress.