What the Faroe Islands could teach Europe about fertility

Parents in Eiði, a town of just 800 people in the Faroe Islands, were given an early Christmas present this year. 

“Our tax revenues have gone up quite significantly, so we thought we’d cancel childcare fees completely in December,” says Rógvi Egilstoft, the town’s mayor. 

Fees are heavily subsidised the rest of the year. In some other Faroese towns they are completely free. Such initiatives are a distant dream for those battling rising childcare costs in the UK. 

Britain has the third most expensive childcare system in the world, according to OECD figures. Between 2010 and 2021, the cost of a part-time nursery place for a child under two increased by 59pc.. Today, childcare costs eat up more than a fifth of an average-earning couple’s income. 

Perhaps unsurprisingly given the cost of having a child, the UK is also facing a trend of falling birthrates. Women in England and Wales now have an average of 1.61 children, close to its lowest level since records began in 1938.

That trend is being mirrored elsewhere with birth rates plummeting well below the natural replacement rate of 2.1 children per woman. Women in France had an average of 1.8 children in 2021 while the birth rate in Spain fell to 1.2 last year. 

Elon Musk, the billionaire Tesla chief executive, has called the trend of declining populations “one of the biggest risks to civilisation”.

Countries are now scrambling to work out how to convince people to have more children. Hungary has offered interest-free loans to prospective parents, while Singapore pays a “baby bonus”, which rises for those with at least three children. 

Last year, an unnamed cabinet minister suggested Britain might offer a similar financial incentive. Could these countries perhaps learn something from the Faroe Islands?

The Faroe Islands, a self-governing Danish territory north of the Shetlands, is an outlier among advanced rich economies. Its fertility rate has hovered around 2.3 to 2.6 children per woman since the start of the 1990s. 

There’s no simple explanation for why the islanders have so many babies. High birth rates are common in less economically developed countries. But the Faroese GDP per capita is higher than in neighbouring countries like Denmark and Iceland. It also has very low inequality and an unemployment rate of only 0.7pc. 

While it’s common that rural and remote areas have slightly higher fertility rates, the gap between the Faroes and other similar areas is still significant. In neighbouring Shetland, there are 1.6 children per woman, while in Orkney the figure is 1.4. In the Åland Islands, an autonomous Finnish territory of 30,000, the birth rate was 1.7 in 2017. 

“I’ve been monitoring the fertility rate for years and wondering when it would start to fall like in other countries. But it keeps surprising me,” says Hans Pauli Strøm, a sociologist and former health minister. 

Strøm believes there are three main factors for why it is so high. The first is geographic proximity and a highly developed infrastructure, making it very quick to get from A to B. The second is close family ties, ensuring good support for new parents. 

“If you realise at 7am that your child is sick, you can call a relative and the problem is solved by 8am,” he says. “Unfortunately, that’s not something that other countries can easily copy.”

The third factor is however something that can be influenced through policy: “Faroese employers are traditionally extremely accommodating towards parents,” he says. 

“There’s a mutual understanding between employers and employees about the flexibility required for bringing up children. That means it’s widely accepted if you need to take time off to care for a sick child or leave early because they injured themselves in nursery,” Strøm says. 

Heri Á Rógvi, an economist, shares the same sentiment but highlights that part-time work is still much more common among women and that those seeking high-flying jobs might struggle to feel at home with the traditional Faroese values.  

“There are some signs that women who are more career-driven or just less keen on having children end up emigrating. So there’s still work to be done,” he says.

Lív Zachariassen Marquardt, a 37-year-old mother of three, moved to Kvívík with her husband after living in Denmark for many years. She works for a shipping company in the capital half an hour away. 

“My employer has never questioned me or made comments such as ‘really, again?’ if I had to stay home with a sick child. They even host regular Christmas and summer parties for the kids,” she says. “It makes me want to be flexible in return too.” 

Some 89pc of Faroese people aged 16 to 64 are in the workforce, the highest in Europe and significantly above the OECD average of 72pc. Strøm says the high numbers of parents in work means there is a greater understanding of parents’ needs. 

Magna Eliana Mørkøre, a 36-year-old mother of four, works full-time in management for the national health service. Her partner, an electrician, also has a full working week. “Obviously, having four children is stressful… but it’s been pretty manageable. We get good support,” she says.

Eirikur í Jákupsstovu, a 35-year-old father of three, also says the support from relatives and the workplace culture has made having a large family and a career possible. His wife is a doctor who works 50 hours a week and he is a lawyer about to become an MP. 

“We both come from big families, and we really wanted that for ourselves,” he says. 

Cheap childcare and good parental leave are not the primary reason why the Faroese fertility rate is so high but they have prevented it from falling, says Strøm. 

Nurseries only became widely accessible all across the country in the early 2000s. Childcare is heavily subsidised where it’s not free. 

It will at most cost £379 a month in the capital, Tórshavn, regardless of the number of children. Parents get 52 weeks of parental leave and can decide how to split most of it. The payments are based on their previous monthly salary with a cap of £2930. Unsurprisingly, the trade-off for this level of support is Scandinavian-style tax rates.

Joanne Ellison, a fertility researcher in the UK, says that expensive housing, childcare and inflexible working arrangements typically act as disincentives for would-be parents. 

Separate analysis has shown that in many rich countries people on average end up having fewer kids than they would like. Incentives such as one-off payments are not very effective at addressing this, she says. 

“It’s important that the Government removes the barriers it can without interfering in people's lives,” she says. 

Much suggests this is what the Faroe Islands has cracked - while being helped by its small size. 

“There’s not a feeling that you have put your life on hold to have kids. You can almost live life as you want even if you’re also having to bring up children,” Strøm says.