Baby blues – Australia becomes more reliant on migration
In many countries the total fertility rate (TFR) continues to slide, amplifying the importance of migration to sustain population growth.
According to the ABS, Australia’s total fertility rate (TFR) fell to 1.481 in 2024. This is the lowest rate on record, continuing a general trend of the TFR decreasing since the late 2000s.
As a comparison, the TFR was 1.782 in 2004 when Peter Costello’s baby bonus was introduced. That was followed by a short-term rise in the TFR to 2.023 by 2008 (although the jury is still out on whether all of this can be attributed to the scheme). Since then, longer term trends have reverted.
The TFR is the number of children a woman is expected to have over her lifetime if she were to experience the current age specific fertility rates throughout her reproductive years.
The TFR has fallen in most developed countries, with Japan (1.20 in 2024) and South Korea (0.72 in 2023) notably low. In comparison to other OECD members, Australia is relatively close to the average TFR but is lower than the US, UK and New Zealand.
The decline in TFR reflects both societal and scientific changes - more women participate in post school education and the workforce now than in previous decades. Additionally, advances in fertility treatments (such as IVF) have provided greater opportunity for women to have children later in their reproductive years.
These trends are observed in age specific fertility rates, with the average age of mothers increasing by 1.2 years from 2014 to reach 32.1 in 2024. Women aged between 30 and 34 years now have the highest fertility rate (106.0 babies per 1,000 women). The tipping point came in the early 2000s. Prior to this, those aged between 25 and 29 had the highest age specific fertility rate.
Women having children later in life often results in fewer children as a result of them running out of reproductive years. However, there has also been a shift in preference towards fewer children.
The latest Household, Income and Labour Dynamics in Australia report found the average number of children desired by men fell to 1.99 in 2023 (down from 2.22 in 2005). While on average women desire slightly more children than men, they have also experienced a fall in the number of desired children from 2.35 to 2.09 over the same period.
While there is no good or bad fertility rate, a lot of emphasis is placed on 2.1. At 2.1, the TFR is high enough that the number of children a woman has leads to the population replacing itself from one generation to the next – aptly this figure is called the replacement rate. At 2.1 the population is able to remain stable. When the TFR falls below this rate, the population will eventually decrease (excluding migration). In Japan, for example, the number of deaths (almost 1.6 million) exceeded the number of births (approximately 600,000) in 2024, resulting in the population contracting by 0.4%.
Australia’s TFR has been below the replacement rate since 1976, so why hasn’t Australia’s population decreased? The answer is increased life expectancy and immigration.
Life expectancy in Australia has increased substantially in the last 30 years alone – increasing by almost five years for females and six years for males from 1993 to 2023. This has somewhat offset the impact of a falling TFR on natural increase (the difference between births and deaths).
Additionally, migration has increased substantially over this time. Excluding the pandemic years, net overseas migration has consistently been the primary driver of annual population growth since 2005.
A targeted migration program can also change a country’s age distribution over time. An ageing population can place greater demand on government services, such as pensions and healthcare, and in Australia this ageing trend has been slowed through migration of younger cohorts.
The importance of migration on population growth is evident in the US. While births still exceed deaths, it’s estimated that in 2025 net migration into the US has turned negative, resulting in part from increased deportations. The impact is a potential decline in the US population in 2025, after the population had grown by 3 million in 2024.
This newsletter was distributed on 23rd October 2025. For any questions/comments on this week's newsletter, please contact our authors:
This blog was co-authored by Shannon Cutter, Manager, Deloitte Access Economics.
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