AM A C D O N A L D - L A U R I E R

May 2024

I N S T I T U T E

P U B L I C A T I O N

IN PARTICIPATION WITH

BOARD OF DIRECTORS
CHAIR

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DLA Piper (Canada) LLP, Toronto

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Jacquelyn Thayer Scott

COO, Airesun Global Ltd;
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University, Sydney

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John Beck

President and CEO,
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Professor of International Relations
and Political Science, University ofToronto, Toronto
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Former Director of Corporate Affairs,
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Professor Emeritus of Politics,
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Jack Granatstein

Brian Flemming

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Dornsife Dean’s Professor,
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Rainer Knopff

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RESEARCH ADVISORY
BOARD

Richard Fadden

Former National Security Advisor to
the Prime Minister, Ottawa

Former Canadian Ambassador to
China, Toronto

Vijay Sappani

Bryon Wilfert

Former Parliamentary Secretary to
the Ministers of Finance and theEnvironment, Toronto

Professor, Health Care Economics,
University of Guelph

Aboriginal author and entrepreneur,
VancouverCo-founder and Senior advisor,
Global Development Solutions,Montréal

Executive Chairman, Martinrea
International Inc, Vaughan

Former Treasurer of Alberta, Calgary

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Rob Wildeboer

Professor Emeritus of Politics,
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Larry Martin

Principal, Dr. Larry Martin and
Associates and Partner, Agri-Food
Management Excellence, Inc
Alexander Moens

David Mulroney

Professor and Chair of Political
Science, Simon Fraser University,
Greater VancouverPeter John Nicholson

Senior Research Professor,
Johns Hopkins University

Inaugural President, Council of
Canadian Academies, Annapolis Royal

Christopher Sands

Elliot Tepper

Former federal cabinet minister,Counsel at Fasken Martineau, Toronto

Hon. Jim Peterson

Senior Fellow, Norman Paterson
School of International Affairs,
Carleton University

Barry Sookman

William Watson

Senior Partner,
McCarthy Tétrault, Toronto

Associate Professor of Economics,
McGill University

Contents
Executive summary | sommaire............................................................................. 4
Introduction................................................................................................................8
Benefits of being in a family.................................................................................10
Evolution of Canadian families............................................................................16
Possible explanations for the negative trends
in family formation and fertility........................................................................... 28
Conclusions, implications for public policy, and next steps..........................37
About the author.................................................................................................... 46
References...............................................................................................................47
Endnotes.................................................................................................................. 54

The author would like to thank the Macdonald-Laurier Institute for funding the project, and the insightfulcomments of its directors and editors. He would also like to thank without implicating Andrew Sharpe,
Bob Baldwin, and an anonymous reviewer for their comments. Lizavetta Zakharova provided able
research assistance. Comments are welcome and may be sent to Tim.Sargent@csls.ca.

Cover design: Renée Depocas (photo: iStock)
Copyright © 2024 Macdonald-Laurier Institute. May be reproduced freely for non-profit and educational purposes.

The opinions are not necessarily those of the Macdonald-Laurier Institute or the Centre for the Study of Living
Standards, or their directors or supporters.

Executive summary | sommaire
In this paper we examine three questions: do people gain significantly from being
part of a family; what are the trends in family formation in Canada over the past two
decades; and what factors explain these trends?
We find that being part of a family is very beneficial, both in terms of income and of
overall well-being. Adults in a couple earn significantly more per person than singles of thesame age, and married people live longer and have better mental health and well-being
than non-married people, even common-law couples. Children in two-parent families havea much higher standard of living than children in one-parent families, even allowing for
benefits and child support. Furthermore, children raised by their original parents have, on
average, better life outcomes than children raised in one-parent families or in stepfamilies.
However, despite these advantages, fewer people in Canada are getting marriedor cohabiting, and those that do are having fewer children. An increasing proportion of
Canadians in their late twenties and beyond are living with their parents, and an increasing
proportion of this age group is remaining single. These proportions are higher than in the
US or the UK, countries that are culturally comparable to Canada.
Furthermore, Canadian women are having fewer babies. Canada’s birth rate is thelowest ever recorded, with women in their twenties putting off childbirth to their thirties,
or foregoing it altogether. Canada now has the third-lowest fertility rate in the G7, lower
even than Germany, and significantly lower than the US or the UK.
At least a third of Canadian children will see their families break up by the timethey are 14, and more than a quarter live in one-parent families. While the proportion ofchildren in one-parent families has remained stable in recent years, it is higher than in theUS, the UK, or France.
Explanations for these trends fall into two categories: economic factors, such as
incomes of young people and housing affordability; and broader social and cultural factors.
From an economic perspective, incomes of young people, especially couples, have been
advancing. However, real housing prices have risen dramatically in Canada over the last
15 years, both absolutely and relative to the US and the UK, and home ownership rates
have been falling for younger people.

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The nature and impact of broader social and cultural trends is hard to measure, but
it is clear that there has been a marked reduction in the mental health of young adults, anda corresponding rise in anxiety about the future. Nonetheless, when surveyed, women
still say that on average they would like to have 2.2 children, well above current levels.
Our findings imply that current assumptions about fertility rates embedded in
official projections are significantly over-optimistic; indeed, these projections do not evenmatch current fertility rates let alone the further drops we are likely to see as a result of
the trend to reduced family formation. Furthermore, a higher proportion of singles in the
population is likely to have other negative fiscal consequences for governments.
Given the clear individual and social benefits of marriage and children, there is acase for making sure that public policy does not impede – and preferably promotes – family
formation and fertility. Clearly such policies would need to target housing affordability
but would likely need to go beyond this to engage with some of the broader social andcultural trends prevalent among young Canadians, particularly anxiety about the future.
We close the paper by suggesting some next steps for research. These could
include modelling future dependency rates based on the trends we have found in marital
status by age, as well as more in-depth analysis, including across countries, provinces,and characteristics such as immigration status, to learn more about the causal factors
leading to the trends we observe. This work could help lead to the development of acomprehensive policy agenda to deal with these negative trends, which could beilluminated by the experience of many countries around the world that are grappling withlow rates of family formation and declining birth rates.

Dans ce document, nous examinons trois questions : si les gens retirent de grands
avantages à faire partie d’une famille; les tendances en matière de formation d’unités
familiales au Canada depuis deux décennies; et les facteurs qui expliquent ces tendances.
Nous constatons que le fait de faire partie d’une famille est très bénéfique, tant sur leplan du revenu que du bien-être général. Les adultes en couple gagnent nettement plus parpersonne que les célibataires du même âge, et les personnes mariées vivent plus longtemps,
jouissent d’une meilleure santé mentale et ressentent plus de bien-être que les personnes
non mariées, et même que les couples en union de fait. Le niveau de vie des enfants est bienplus élevé dans les familles biparentales que dans les familles monoparentales, y compris
après prise en compte des avantages sociaux et des pensions alimentaires. En outre, lesenfants élevés par leurs premiers parents réussissent mieux dans la vie, en moyenne, queles enfants élevés dans les familles monoparentales ou recomposées.

Tim Sargent | May 2024

5

Toutefois, malgré ces avantages, au Canada, moins de personnes se marient ou
cohabitent en union de fait et, lorsqu’elles le font, elles ont moins d’enfants. Dans une
proportion croissante, on vit encore chez ses parents à l’approche de la trentaine et un peu
au-delà et, également dans une proportion croissante, dans ce groupe d’âge, on demeurecélibataire. Ces proportions sont plus élevées qu’aux États-Unis et au Royaume-Uni, pays
comparables au Canada sur le plan culturel.
Par ailleurs, les Canadiennes ont moins d’enfants, le taux de natalité au Canada étant
le plus bas jamais enregistré. Dans la vingtaine, elles repoussent la maternité à la trentaine,
voire y renoncent entièrement. Le Canada vient maintenant au troisième rang des pays
du G7 au taux de fécondité le plus bas, un taux inférieur même à celui de l’Allemagne, etnettement inférieur à celui des États-Unis et du Royaume-Uni.
À l’âge de 14 ans, au moins le tiers des enfants canadiens ont vécu une séparation
familiale, et plus du quart vivent dans une famille monoparentale. Bien que stable cesdernières années, la proportion d’enfants vivant dans des familles monoparentales est plusélevée qu’aux États-Unis, au Royaume-Uni et en France.
Les explications de ces tendances relèvent de deux catégories : les facteurséconomiques – tels que les revenus des jeunes et l’abordabilité du logement – et certains
grands facteurs sociaux et culturels. Du point de vue économique, les revenus des jeunes, enparticulier des couples, ont progressé. Toutefois, les prix réels des logements ont augmentéde façon spectaculaire depuis 15 ans – tant en termes absolus que par rapport aux États-Unis
et au Royaume-Uni – et les taux d’accession à la propriété ont baissé pour les jeunes.
Si la nature et l’impact des grandes tendances sociales et culturelles sont difficiles
à mesurer, en revanche, il ne fait aucun doute que la santé mentale des jeunes adultes sedétériore de façon marquée, de pair avec une hausse correspondante de leur anxiété faceà l’avenir. Néanmoins, lorsqu’elles sont interrogées, les femmes, en moyenne, déclarent
toujours vouloir 2,2 enfants, un nombre bien supérieur aux niveaux actuels.
Nos conclusions laissent supposer que les hypothèses retenues pour projeter lestaux officiels de fécondité sont beaucoup trop optimistes; en effet, les projections necorrespondent même pas aux taux actuels de fécondité, et c’est sans parler des reculs
additionnels que pourrait causer la tendance à la baisse dans la formation de ménages. Par
ailleurs, une proportion plus élevée de célibataires dans la population devrait entraîner denouvelles conséquences fiscales négatives pour les gouvernements.
Compte tenu des avantages individuels et sociaux évidents qu’offrent le mariage etles naissances, il convient de favoriser les politiques publiques qui n’entravent pas – et depréférence encouragent – la formation de ménages et la fécondité. Or, si, de toute évidence,ces politiques doivent cibler l’abordabilité du logement, il va falloir qu’elles dépassentmême cet objectif pour influer sur certaines des larges tendances sociales et culturelles qui
prévalent parmi les jeunes, en particulier l’anxiété face à l’avenir.
Nous proposons dans ce document, en guise de conclusion, certaines étapes pourla recherche. Ainsi, on pourrait, entre autres, modéliser les futurs taux de dépendance sur

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Trends in family formation and fertility in Canada since 2001

la base du lien décelé entre la situation familiale et l’âge et, afin d’élucider les facteurs
responsables des tendances observées, procéder à une analyse approfondie par pays,
province et d’autres caractéristiques comme le statut d’immigrant. Ces travaux pourraient
contribuer à l’élaboration d’un programme politique global visant à contrer ces tendances
négatives, en mettant en lumière l’expérience de nombreux pays aux prises avec de faibles
taux de formation de ménages et une natalité en baisse.

Tim Sargent | May 2024

7

Introduction
Families matter. Not only are families the place where children, the future of any

society, are born and raised, but for most people, forming a stable relationship,
setting up a home, and having children are amongst the most fulfilling andimportant achievements of their lives. Having strong and stable families is an
essential goal for any society that wants to maximize human flourishing, both
now and in the future.
And yet, not just in Canada but across the Western world, families havebeen buffeted for more than a generation by changing economic and social
trends, including the decline of well-paying jobs for less-educated workers,changing laws and social norms around marriage and divorce, the rise of theinternet and social media and its impacts on everything from mental healthto dating behaviour, declining housing affordability, particularly for first-timebuyers, and in the last three years, COVID and the resultant lockdowns.
Now that COVID appears to be behind us and the first smartphone generation – Generation Z – is entering adulthood, this is a good moment to take stockof Canadian families: is being in an intact two-parent family uniquely beneficial?
Are younger generations finding it harder to form and maintain families? What ishappening to birth rates? Are more children living in one-parent families?
To answer these questions, we use data, mainly from Statistics Canada, toinvestigate trends in Canadian families over time and to compare Canada toother G7 countries, especially the US and the UK. Section I begins by looking
at the potential benefits for adults of being in a couple, and for children ofbeing in a two-parent family. We use income data to understand the economic
advantages of being in a family, and then look at the literature on happiness andwell-being to understand the benefits for mental and physical health of being ina couple or in an intact family.

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Trends in family formation and fertility in Canada since 2001

Section II looks at the trends in family formation and fertility in Canada.
We begin by examining the trends over the last 20 years in the proportion ofyoung adults still living at home and the proportion of young adults who areremaining single and compare these percentages to other countries. We thenlook at fertility rates and how changes in fertility at different ages has affected
the overall trend. Finally, this section considers the trends in the proportion ofchildren who are still living with their original parents, as well as the proportion
living with only one parent, and the proportion living in a reconstituted family.
In section III we turn to potential explanations for these documented
trends and attempt to determine which of them might be broadly consistent
with the data. We look at the economic situation of young adults, particularly
with respect to housing, which is a key enabler of both family formation andfertility, as well as time spent in higher education. We then go beyond the usual
economic statistics to look at measures of anxiety and psychological healthamong young adults. We also look at whether lower fertility is something thatpeople desire or whether they are having fewer children than they planned for.
The last part of the paper details our conclusions, sketches out some
implications for public policy, and lists some potential next steps for researchin this area.

Young Canadians are increasingly delaying
leaving home, delaying marriage or
cohabitation, having fewer children.

Overall, we find that while both children and adults benefit enormously
from being in a family, young Canadians are increasingly delaying leaving home,delaying marriage or cohabitation, having fewer children, and that a significant
fraction of those children will see their families break up. Canada is doing worse
in all these respects than the US and the UK, culturally comparable countries.
The high cost of housing is likely one factor, but there seem to be other deeper
cultural and social reasons for these phenomena, which may be reflected in
the rapid deterioration in mental well-being among young adults that began in
the mid-2010s.

Tim Sargent | May 2024

9

These trends call into question the demographic projections that underlie
long-term federal and provincial fiscal forecasts, as well as projections uponwhich public pension plans such as the Canada Pension Plan are based. Given
the significant economic, emotional, and health benefits individuals receive
when they are in a family, as well as the broader benefits to society from families,
there is also a good case for governments to look at policies that would makeit easier for young adults to leave home and form relationships, and to haveand raise children. To understand what is causing the steady erosion in family
formation and fertility, and the policies that might be deployed to ameliorate
these trends, research must focus separately on each of the key life transitions
that comprise the path of forming a family and having children who can thenhave families of their own: leaving home, finding a permanent job, forming astable relationship, buying a house, and having children.

Benefits of being in a family
This section looks at the potential benefits of being in a family, for both adults

and children. We begin with the more easily measurable economic benefits,
and then examine the impacts on health and well-being.
Economic benefits for adults
To understand the economic benefits of being in a family we look at data from
Statistics Canada’s T1 Family File (Statistics Canada 2023j). These data aretaken from income tax filings and cover individuals in census families (i.e.,families consisting of a married or cohabitating couple and children) as wellas unattached individuals. One way to compare economic well-being is to ask
whether the median single person earns as much as one person in a couple.
To do this we assume the couple’s income is split equally, and so the question
becomes whether the median single person earns as much as half the medianincome of a couple.
However, this comparison does not consider the economies of scalethat exist when sharing a household with other family members. To take these10

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Trends in family formation and fertility in Canada since 2001

FIGURE 1: Pre-tax income of a single person relative to a person in a couple, 2019
100
90

88.1

80
70

65.7

66.1

60

49.2

50
40
30
20
10
0

unadjusted

adjusted
aged 25–34

aged 45–54

Source: Statistics Canada 2023a, Table 11-10-0012-01.

economies of scale into account, analysts typically use “equivalence scales” toadjust income for different family sizes. We use a measure called the “OECDmodified scale” (OECD 2013), which assumes that a couple requires only 1.5
times the income of a single person to have the same standard of living.
Figure 1 compares the median incomes of single people to couples, both
adjusted and unadjusted by equivalence scales. We use data from 2019 to
avoid the confounding influence of work disruptions and of various temporary
benefit programs put in place to deal with the COVID-19 pandemic. We do
this for two age groups: people aged 25–34, and people aged 45–54. We breakthe data down into these age groups to avoid comparing seniors, who havelower incomes and are more likely to be single (often due to widowhood), withmiddle-aged people who are at their peak earnings and who are more likely to
be in a couple.
The data show that there are clear benefits to being in a couple. Single
people have incomes that range from 88 percent of the income of a person in acouple for 25- to 34-year-old people when not adjusting for economies of scale,to only 49 percent for single people aged 45–54 when adjusting for economies
of scale.

Tim Sargent | May 2024

11

These gaps are sizable, and do not take into account that many couples
also have children and so one partner might not be working full time. Whether
the gaps are due to more productive people being more likely to be in acouple (a sorting effect), or whether being in a family makes someone moreproductive, perhaps because they have more of an incentive to earn income,is hard to say from these data. However, even if what we observe were purely
a sorting effect, an increase in the proportion of couples would significantly
raise living standards purely because of the economies of scale of being in a
family. The modified OECD scale mentioned above suggests that two single
people forming a couple would increase their combined standard of living by
33 percent.
Economic benefits for children
How much do children benefit economically from being in a two-parent family
as opposed to a one-parent family? Figure 2 shows how the income for eachmember of a two-child family compares depending on whether or not they arein a one-parent family. To construct these data we take family income, both preand post-tax, for 2019. We then divide that income by the number of family
members (four for two-parent families, three for one-parent families), to get
the unadjusted measure. For the adjusted measure, we divide income using themodified OECD equivalence scale (2.1 for two-parent families, 1.6 for oneparent families).
The data show that members of one-parent families have pre-tax incomesof only 60 percent of members of two-parent families; when adjusted for family
size using the modified OECD equivalence scale the figure is very similar at 59
percent. After tax, these figures rise, but only a little: to 67 percent (unadjusted
for family size) and 66 percent (adjusted for family size). The figures are similar
for families with one child.
These figures indicate that one-parent families have only two-thirds thestandard of living of couples in families. Put another way, the standard of living
for members of a two-parent family is 50 percent higher than for one-parent
families. This is despite the fact that the incomes of one-parent families in thesedata often include child support payments from the other parent. Clearly then,children in one-parent families have a significantly lower standard of living
than children in two-parent families.

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Trends in family formation and fertility in Canada since 2001

FIGURE 2: Income per family member of a lone-parent family relative to a two-parent
family, two children, 2019

100
67.5

90
80

66.4

59.8

58.9

70
60
50
40
30
20
10
0

unadjusted

adjusted
pre-tax

post-tax

Source: Statistics Canada 2023c, Table 11-10-0017-01.

Health and well-being benefits for adults
Beyond the immediate economic benefits conferred by family membership,
there are considerable health and happiness benefits, too. There is a large literature on “marriage protection” – the extent to which marriage increases longevity– which finds that married people live significantly longer than unmarried people. For example, Rendall et al. (2011) examined a large US data set. They founda highly significant benefit for marriage among both men and women, even after controlling for a variety of socio-economic characteristics including healthstatus. Unmarried men were 33 percent more likely to die in the next year thantheir married counterparts, and unmarried women were 14 percent more likely
to die. Controlling for socio-economic variables allowed the authors to separate
out this marriage protection effect from the marriage selection effect, whichis the tendency for people with characteristics associated with better healthto marry.
These longevity benefits come from a variety of sources. Martinuk (2016)
summarizes evidence from over 50 studies. She finds that married people have
healthier lifestyles, have fewer unhealthy habits, and are less stressed. As a result,

Tim Sargent | May 202413

married people have significantly lower incidence of, and better survival rates
from both cancer and cardiovascular disease than unmarried people.
Martinuk (2016) also looks at mental health. Across the literature shefinds that married individuals are significantly less stressed and less likely tosuffer from depression and other emotional pathologies than unmarriedpeople. Married people are also happier. In a recent study, Pelzman (2023) uses
successive General Social Surveys in the US to look at the evolution of happinesssince 1972. He finds “a very large happiness gap between those who are married
and those who are not: the married population is over 30 points happier thanthe unmarried, and that number has hardly changed since the 1970s. It is thesame […] for men and women. Mean happiness for the non-married hovers
near zero (as many Sad as Happy) throughout the sample period.” This gap isthe largest happiness gap he finds: no other sociodemographic characteristic(age, sex, race, etc.) comes close to this difference.

Married individuals are significantly lessstressed and less likely to suffer fromdepression (...) than unmarried people.
Grover and Helliwell (2014) use a UK data set that allows them tocontrol for selection effects by using information on pre-marriage well-being.
They find that even after controlling for the selection effects, marriage has
positive impacts on happiness, particularly at middle age when happiness is
usually lower than at other points in the life cycle. Because the authors control
for income, these impacts are in addition to the potential increase in happinessthat results from having more financial resources.
What about cohabitation as opposed to marriage? Although the literatureon this issue is smaller than that on marriage, it seems that the benefits ofcohabitation seem to be significant, but less than those of being married. In
their survey of the relevant literature, Robles et al. (2014, 142) found that “theprevailing view is that cohabitation is associated with greater advantages forwell-being relative to being non-partnered, but fewer economic, psychologicaland health benefits relative to being married.”

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Trends in family formation and fertility in Canada since 2001

Well-being benefits for children
There are considerable benefits for children of being in an intact twoparent family. Surveying the literature on this issue, Anderson (2014) finds thatchildren from intact homes have higher educational attainment, are less likely
to engage in risky or delinquent behaviour and have lower rates of incarcerationand teen pregnancy. Echoing this conclusion, McLanahan and Sawhill (2015,4) find that “most scholars now agree that children raised by two biologicalparents in a stable marriage do better than children in other family forms acrossa wide range of outcomes.”
Furthermore, these benefits are not simply a result of greater resources
such as income or (in the US) access to health insurance. Ribar (2015, 22)
looks at the empirical evidence and finds that these financial factors provide
only a partial explanation for the advantages of living with both biologicalparents, a pattern that he concludes is “repeated across many, many studies.”
If parents split up and form new relationships, this is often not as
beneficial to children as being in an intact family. In the US, children wholive with a mother who has a new male partner are 11 times more likely to beabused than those who live with both biological parents, and six times more
likely to be neglected (Wilcox 2011).
Summary
The data are very clear. Being in a family confers very significant benefits, bothfor adults and for children. These benefits go beyond simply having more
economic resources: married people live longer and have better mental andphysical health than singles, and children who live with their original parents
have better life outcomes than those who do not. It could be argued that
this simply reflects a sorting effect, with happier and healthier individuals
more likely to marry. However, many of these studies control for a varietyof observable characteristics and still find that family membership confers
significant advantages for both adults and children.

Tim Sargent | May 2024

15

The evolution of Canadian families
This section explores what the available data tell us about how families are evolv-

ing over time given changes in family formation, family dissolution, and fertility.
Trends in the family status of adults
We begin by looking at the family status of adult Canadians, defined as those
aged 20 and over. Figure 3 below shows the data on the marital status for thisgroup from successive semi-decennial Canadian censuses, beginning in 2001
and finishing in 2021.
The proportion of adults aged 20 and over who are married has declined
between 2001 and 2021: it fell from 54.0 percent in 2001 to 47.4 percent in
2021. This decline was partially offset by an increase in the proportion of adults
in common-law relationships, which rose from 10.1 percent to 13.4 percent.
However, this rise was not enough to offset the decline in marriage rates, sothat the proportion of adults in couples – those who were either were marriedor common-law – fell, from 64.1 percent in 2001 to 60.8 percent in 2021,
a decline of 3.3 percentage points.

FIGURE 3: Marital status of adults aged 20 and over, 2001–2021

100%
90%

6.8
8.6

6.4
8.8

6.2
9.3

6.0
9.3

5.7
9.2

54.0

52.1

50.4

49.0

47.4

10.1

11.3

12.1

12.8

13.4

20.6

21.3

22.1

22.9

24.3

2001

2006

2011

2016

2021

marrieddivorced/separated

widowed

80%
70%
60%
50%
40%
30%
20%
10%
0%

never marriedcommon law

Sources: Statistics Canada 2022c, Table 98-10-0125-01;
2001 data are estimated from Statistics Canada 2022d, Table 17-10-0060-01.

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Trends in family formation and fertility in Canada since 2001

The decline in the proportion of adults in couples was not driven by ahigher proportion of divorced or widowed people: while there was a slightincrease in the number of divorced adults, this was offset by a slight decline in
the proportion of widowed adults. Rather, the decline in couples is driven by
an increase in the number of adults who are single – which is to say that they
were neither married nor living together as common-law partners – and had
never been married (although they might have formerly been in a common-law
relationship). This figure has grown over time, rising from 20.6 percent in 2001
to 24.3 percent in 2021, an increase of 3.7 percentage points.
While an increase of 3.7 percentage points over 20 years is not dramatic,
the picture changes when we break down the data by five-year age groups, as
shown in Figure 4. For the 35–39 and 40–45 age groups, the proportion of
couples has dropped by only 2 percent between 2001 and 2021. However, foryounger age groups there has been a much steeper decline. The proportionof those aged 30–34 who are in a couple dropped by 5.3 percentage points,
and the proportion of those aged 25–29 who are in a couple dropped by 10.9
percentage points, so that by 2021 slightly more than half of young adults aged
25–29 were neither married nor living common-law.

FIGURE 4: Proportion of adults who are in couples, by age group, 2001–2021
80
75
70
65
60
55
50
45
40
35
30

25–29

30–34
2001

2006

35–39
2011

2016

40–44
2021

Source: Statistics Canada 2022c, Table 98-10-0125-01.

Tim Sargent | May 2024

17

FIGURE 5: Singles who have never married as a proportion of the adult population
70
60
50
40
30
20
10
0

25–29

30–34
2001

2006

35–39
2011

2016

40–44
2021

Source: Statistics Canada 2022c, Table 98-10-0125-01.

This marked decline in marriage or common-law status among younger
adults is not driven by more divorces – indeed the proportion of divorced people
in that age range has declined. Rather, it is entirely explained by an increase in
the proportion of young adults who are single and have never married. Figure
5 shows that the proportion of single, never married 25- to 29-year-olds has
risen quite significantly, from 45.2 percent in 2001 to 58.5 percent in 2021,
an increase of 13.3 percentage points. The proportion of single, never married
30- to 34-year-olds rose from 25.1 percent to 34.3 percent, a 9.2 percentage
point increase.
Even older age groups are seeing a significant increase in the proportionof single and never married adults. This proportion rose from 17.2 percent to23 percent for 35- to 39-year-olds, an increase of 5.8 percentage points, andfrom 12.9 percent to 18.5 percent for 40- to 44-year-olds, an increase of 5.6
percentage points.
Figure 6 looks at comparable data from the US and the UK for 2021
(2019 for the UK) and for 2011. We look at the 30–44 age group as the UKdata do not allow for a more detailed breakdown. For Canada, as one would
expect from Figure 5, the proportion of never married singles rose from 21.6

18

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

FIGURE 6: Proportion of never married singles aged 30–44 for Canada, the UK, and theUS, 2011 and 2021
30
25

25.4
21.6

20

23.7
19.7

20.1

19.4

15
10
5
0

Canada

UK
2011

US
2021

Note: 2021 data for the UK are for 2019.
Sources: Canada: Statistics Canada 2023d, Table 98-10-0132-01; UK: Office for National Statistics 2021a,
Annual estimates of population by legal marital status and cohabitation status; US: Author’s calculations
and US Census Bureau 2023c, Current Population Survey Public Use Microdata.

percent to 25.4 percent. The US has a slightly lower proportion than Canada– 23.7 percent – but with a similar increase, rising from 20.1 percent in 2011.
The UK has a smaller proportion of never married singles; interestingly, this
proportion is little changed from 2011.
Thus, the overall trends in marital status mask some quite significant
shifts within age groups. Essentially what seems to be happening is that younger
cohorts are increasingly delaying not just marriage but also common-law
relationships until their late 30s or early 40s, with a growing fraction of people
remaining single well into middle age.
This postponement or retreat from cohabitation is reflected in a rising
proportion of young people who are remaining with (or going back to) theirparents. Figure 7 shows trends in the proportion of people aged 25–34 whoare living with their parents, by sex. The data show that this proportion has
increased significantly: for men it has risen from 20.8 percent in 2011 to 24.3
percent in 2021, and for women from 12.8 percent in 2011 to 16.1 percent in
2021. It is striking that almost a quarter of 25- to 34-year-old men live with theirparents, despite being beyond the usual age at which higher education ends.

Tim Sargent | May 2024

19

FIGURE 7: Proportion of people aged 25–34 living with their parents, 2011, 2016, and 2021

30
25
20

16.7

18.4

20.8

20.2

24.3

22.4

15

12.8

14.4

16.1

10
5
0

both sexes

men
2011

women

2016

2021

Source: Statistics Canada 2022e, Table 98-10-0134-01.

FIGURE 8: Proportion of people aged 25–34 living with their parents, Canada, the UK, andthe US, 2021
30
24.3

25
20

21.5

20.2
16.1

20.3
16.8

15.6

15

13.2
9.7

10
5
0

Canada

UK
total

men

US
women

Sources: Canada: Statistics Canada 2022e, Table 98-10-0134-01; UK: Office for National Statistics 2023a, Young
Adults Living With Their Parents; US: US Census Bureau 2023a, Historical Living Arrangements of Adults.

20

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

Figure 8 compares Canada with the UK and the US for 2021. For both
men and women, Canada has the highest proportion of 25- to 34-year-olds
living with their parents. For men, it is 24.3 percent, as mentioned above,
compared to 21.5 percent for the UK and 20.3 percent for the US. For women,
Canada has 16.1 percent living with their parents, compared to 9.7 percent for
the UK and 13.2 percent for the US. Thus, Canada has not only the highest
proportion of never married singles in this age group out of the three countries,
it also has the highest proportion of people in that age group living at homewith their parents.
Trends in fertility rates
In this subsection we look at what has been happening to fertility in Canada
while marriage and cohabitation rates have been dropping. The most common
metric of fertility is the fertility rate, which is the number of children a woman
could expect to have in her lifetime if current age-specific fertility rates persist.
As Figure 9 illustrates, Canada’s fertility rate, which had dipped in the late
1990s to about 1.5 but subsequently recovered to 1.7, was only 1.3 in 2022,
down from 1.6 only six years earlier in 2016.

FIGURE 9: Total fertility rate per woman, 1991–2021

1.8
1.7
1.6
1.5
1.4
1.3
1.2
1.1
0
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021

Source: Statistics Canada 2023e, Table 13-10-0418-01.

Tim Sargent | May 2024

21

FIGURE 10: Fertility rates in the G7, 2022
1.9
1.8
1.7
1.6
1.5
1.4
1.3
1.2
1.1
1.0

CanadaFranceGermany

Italy

Japan

UK

US

Sources: Canada: Statistics Canada 2023e, Table 13-10-0418-01; France: INSEE 2023a, Bilan
démographique 2022; Germany: Statiches Bundesamt 2023; Italy: Istat 2023; Japan: Otake
2023; UK: Office for National Statistics 2021b; US: Hamilton, Martin, and Osterman 2023.
Note: UK data are for 2021.

This is the lowest fertility rate ever recorded in Canada and, as Figure 10
shows, is the third lowest in the G7, close to Italy and Japan, and well below
even Germany, let alone the UK, the US, and France. It is also well below the
replacement rate, which is slightly above 2 children per woman.
Both a woman’s desire to reproduce and her ability to do so vary quite
significantly over the course of her reproductive years. Figure 11 breaks down
the aggregate fertility rate by five-year age group. We can see from the figure that
there are two distinct periods. From 1991 to 2008 or so fertility rates declined
markedly for women under age 30, before plateauing. This is what leads tothe decline in the overall fertility rate between 1991 and 2000. However, thefertility rate of women 30 and over started rising, especially after 2000, helping
to push the total fertility rate back up. This is consistent with what is called atempo effect: women delaying having children but not putting it off altogether.
The picture after 2008 is quite different. Fertility rates for women under
30 started to drop again, as they had in 1990s, and have kept dropping, so thatby 2022 fertility rates for women aged 20–24 were less than half what they
were in 2008, and fertility rates for women 25–29 were only two-thirds of

22

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

FIGURE 11: Fertility rates in Canada by age group, 1991–2022
140
120
100
80
60
40
20
0

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021
15–19

20–24

25–29

30–34

35–39

40–44

Source: Statistics Canada 2023e, Table 13-10-0418-01.

2008. Teenage pregnancy has almost vanished: a women aged 40–44 is now
more than twice as likely to give birth than is a teenaged girl.
However, unlike before 2008, these declines have not been matched bya significant increase in fertility rates in older age groups overall. While there
has been a slight increase for women aged 35 and over, fertility rates for women
aged 30–34 have declined, so that overall fertility for women 30 and over has
actually declined slightly. This suggests that what we are witnessing is not a
tempo effect – delaying childbearing – but a decline in overall lifetime fertility– less childbearing overall. One very salient factor here is that a woman’s fertility
starts declining after the age of 30 or so, and particularly after age 35 (Delbaere
et al. 2020) and so at some point, even with modern technologies, postponing
childbirth means foregoing it altogether.
Another way to look at the fertility data is by comparing it to marital
status. Figure 12 shows total fertility rates for both married and unmarried
women, along with marriage rates for five-year intervals between 2006 and 2021.
(Unfortunately the data on births by women in common-law relationships is
not consistent over time). Unsurprisingly, the total fertility rate for married
women is much higher than for unmarried women, as most women prefer tohave the security of a committed partner before having a family – indeed, about
Tim Sargent | May 2024

23

FIGURE 12: Fertility rates (TFR) by marital status and proportion of women Age 15–49 whoare married, 2006–2021

42

6.00
5.00

4.68

4.55

41

4.80

40
39

3.79

4.00

38
37

3.00

36
2.00
1.00
0

35
0.95

0.99

0.96

0.92

34
33

2006

2011

TFR – married

TFR – unmarried

2016

2021

32

proportion of women 15-49 married

Sources: Statistics Canada 2022c, Table 98-10-0125-01; 2023f, Table 13-10-0419-01.

60 percent of births are to married women. Interestingly, between 2006 and2016, total fertility rates for married women rose slightly, offsetting a decline
in the proportion of married women of childbearing age. However, between
2016 and 2021, fertility rates for married women fell significantly, from 4.80
to 3.79 children per woman. Fertility rates for unmarried women remainedlargely stable over the whole period.
This raises the question of which factor is more important for explaining
the overall decline in fertility rates: is it the decline in the number of married
women, or is it the decline in the number of children per married women?
In order to gauge the relative importance of these factors we decomposed thechange in the fertility rate using a technique called shift-share analysis.1 Looking
at the overall period from 2006 to 2021, we found that 66 percent of thechange in fertility rates was attributable to lower marriage rates, and 34 percent
to lower fertility rates among married and unmarried women. However, if welook just at the 2016–2021 period the proportions reverse: only 29 percent of
the change is attributable to lower marriage rates, and 71 percent is attributable
to lower fertility rates. Thus, the steady decline in marriage has put downward

24

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

pressure on fertility rates (recognizing the endogeneity between marriage
rates and fertility means that lower (desired) fertility will put downwards
pressure on marriage rates if fertility is an important motive for marriage, as
seems plausible), with declining fertility among married women now adding
significantly to that downward pressure.
Trends in the structure of families with children
We now turn to an overview of the kind of families in which Canadian children
live. These could be intact families where all the children are living with bothoriginal parents, single-parent families headed by one of the original parents, or
stepfamilies where one of the two parents is not the original parent of at least
one of the children.
Figure 13 shows the proportion of children in each of these family types,
broken down by married and common-law couples. These data show that in
2021, 63.4 percent of children were living with both of their original parents,
down very slightly from 63.9 percent in 2011. Of those original parents, 54
percentage points were married couples, and 9.3 percentage points werecommon-law couples, so intact families were overwhelmingly headed by

FIGURE 13: Proportion of children in various family types, 2011, 2016, and 2021
60

55.7

54.4 54.0

50
40
27.1 27.7 28.2

30
20
8.1 8.9 9.3

100

intact married

4.6 4.5 4.2

4.4 4.4 4.2

intactcommon law

stepfamily
marriedstepfamily
common law

2011

2016

one-parent
families

2021

Source: Statistics Canada 2022f, Table 98-10-0124-01.

Tim Sargent | May 2024

25

FIGURE 14: Proportion of children by family type and age of the youngest child, 2021

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

less than 2 years
intact family

2 to 5 years

6 to 14 years

stepfamily

15 to 24 years

one-parent families
Source: Statistics Canada 2022f, Table 98-10-0124-01.

married couples. A further 8.4 percent of children lived in stepfamilies, downfrom 9.0 percent in 2011. Interestingly, half of these stepfamilies werecommon-law couples, indicating that when families with the original parents
break up, the children are much more likely to end up in a common-law couple
family than they were to be born into such a family. Finally, 28.2 percent ofchildren lived in one-parent families, up from 27.1 percent in 2011. Thus,
overall, slightly more than a third of children no longer live with both of their
original parents.
Figure 14 breaks down the data for 2021 by the age of the youngest
child. Of children in families with a child under the age of two, only 12 percent are in a one-parent family, with an additional 7 percent in a stepfamily.
However, these proportions rise with age, so that 27 percent of children infamilies where the youngest child is aged 6 to 14 are in a one-parent family,
with an additional 9 percent in a stepfamily. Only 64 percent of children in a
family where the youngest child is in this age group are still living with bothoriginal parents.
From these numbers we can extrapolate that approximately a third of
Canadian children will see their original parents separate by the time they are

26

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

FIGURE 15: Proportion of children under 18 living in a one-parent family in four G7
countries, 2021

30

27.6

26.6

25
21.7

21.6

France

UK

20
15
10
5
0

CanadaUS

Notes: Canada: Data are not publicly available for the general under-18 category so weestimated proportions using data for children aged 6–14 and 15–25; France: Data are for 2020;
UK: Data are for dependent children 18 and under and exclude children aged 16–18 who are
not in full time education or who have a spouse, partner, or child living in the house.2
Sources: Canada: Author’s estimates based on Statistics Canada 2022f, Table 98-10-0124-01;
France: INSEE 2023b; UK: Office for National Statistics 2023b, Families and households;
US: Census Bureau 2023b, Historical Living Arrangements of Children.

14. Of this proportion, a third or so will become part of a new stepfamily, while
the remaining two-thirds – around a quarter of all children, will live in oneparent families.
How does the situation in Canada compare with other countries?
Figure 15 compares the proportion of children in Canada under 18 living
in a one-parent family in 2021 with three other G7 countries: France, theUK, and the US. Canada has the highest proportion of children living in
one parent families, 27.6 percent, closely followed by the US at 26.6 percent.
France and the UK have significantly lower proportions at 21.7 and 21.6
percent respectively.
Canada is therefore on the high side internationally when it comes the
proportion of children living in one-parent families, surpassing even the US in
this respect.

Tim Sargent | May 2024

27

Summary
We find clear evidence that a rising proportion of young Canadians are
increasingly less likely to leave home, get married or cohabit, and have children.
This is true not just compared to the recent past, but to culturally similarcountries. While the trends are stable, Canadian children are more likely tolive in one-parent families, and family breakup will affect a large minority ofCanadian children. Thus, at each point in the process of forming a couple andhaving a family, we see worsening trends, and of course the fewer people getting
married or cohabiting has negative implications for fertility rates, suggesting
further decreases in the future.

Possible explanations for the negative
trends in family formation and fertility
In section I we found that families confer very significant benefits on theirmembers. However, in section II we found that younger generations are more
likely to live with their parents, less likely to cohabit, and are having fewer
children. Furthermore, Canada is doing relatively poorly compared to the
US and the UK on this metric, even though these countries show some of thesame trends. This section turns to possible explanations: while an in-depth
examination is beyond the scope of this paper, we do attempt to sketch out andnarrow down the range of possibilities.
Employment and incomes of young people
We will first look at the economic position of young people, particularly inthe 25–29 age group, which is the group where we would normally expect tosee people settling down and forming families. Most people at this age havecompleted their formal education and they have entered the labour market. For
women, as noted above, this is the period of maximum fertility, before thisstarts to drop after the age of 30 or so.
One obvious impediment to leaving home and starting a family is theinability to find a job. Bellido and Marcen (2021), for example, find a negative

28

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

FIGURE 16: Unemployment rate for people aged 25–29 by sex, 1976-2022
16
14
12
10
8
6
4
2

19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22

0

men

women

both

Source: Statistics Canada 2024a, Table 14-10-0327-01.

relationship between higher unemployment and marriage rates using European
data. However, as Figure 16 shows, unemployment rates for both men andwomen in the 25–29 age group are at historical lows, and, apart from the
COVID lockdown period, are significantly lower than in the 1980s and 1990s.
Of course, even with low unemployment it might be that incomes arestagnating if wages for young people are flat or declining in real terms. However,this does not seem to be the case. Figure 17 shows real median incomes forboth single people and couples aged 25–34. Incomes rose considerably forboth groups during the COVID period – largely owing to government income
support schemes. Prior to COVID, real incomes for single people did indeed
stagnate from 2012 onwards – after the recovery from the Great Recession –although over the decade of the 2010s incomes were higher than in the decadeof the 2000s by about 3.1 percent. Couples, however, saw a much greater
increase in their family incomes, so that incomes for them in the 2010s were
9.7 percent higher than in the 2000s.
Thus, while real incomes of single people are not growing anywhere nearlyas quickly as those of couples, there is certainly no declining trend, althoughthe 2022 data will likely show a decline with the expiration of government

Tim Sargent | May 2024

29

FIGURE 17: Real median total income for individuals and couples aged 25–34, 2000–2021

100,000

45,00095,00040,00090,00035,00085,00030,00080,00025,00075,00020,00070,000

20
00
20
0
20 1
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21

50,000single person (LHS)

couple family (RHS)

Note: Incomes are in 2021 dollars.
Source: Statistics Canada 2023b, Table 11-10-0012-01; 2024b, Table 18-10-0005-01.

COVID programmes and the increase in inflation. It therefore seems unlikelythat incomes alone can explain much of the delay in leaving home and forminga couple that we see in the data.
What would be the impact of higher incomes on fertility? The data forcouples aged 25–34 do not suggest any decline in the overall resources available to them when they start a family. On the contrary: the sharp decline in
the birth rate since 2008 has coincided with a steady increase in real medianincomes. However, as Kearny et al. (2022) outline, it is important to distinguishbetween the impacts of higher incomes per se, which means people can afford alarger family, and the impacts of higher wages, which increase the opportunity
cost of time, particularly of the primary caregiver (usually the woman), andmake children more expensive. It is not obvious from the literature which ofthese two effects will predominate. An increase in women’s wage rates relative
to men would, everything else being equal, be more likely to lead to lower
fertility, but in Canada there has not been a large change in the ratio of women’s
median hourly wages to those of men in recent years (see Statistics Canada
2024c, Table 14-10-0417-01).

30

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

Housing affordability
Another economic explanation for both declining rates of family formationand falling fertility rates is housing affordability. Each of the key transitions
we have been examining – moving out of the parental home, moving in with alife partner, having children – require access to affordable housing. If housing
is very expensive relative to incomes, that will act as a disincentive for people
to move out of the parental home, either to live alone or in a couple, and will
also make it more expensive to have children, who require additional space inthe form of bedrooms and play areas. Couples hoping to start a family are also
likely to place more value on owning a house or apartment than renting one,given the greater financial stability associated with owning a property.
Because land is in limited supply (particularly land close to large
population centres), and because productivity growth in construction has been
low, housing prices in Western countries have tended to rise faster than inflation.
This has been especially true when immigration levels are high. Housing costs
have certainly been rising in Canada in recent years, both in absolute and relative
terms. Figure 18 shows residential property prices in Canada, the US, and the

FIGURE 18: Real price of residential property in Canada, the US, and the UK, 2006, 2011,2016, and 2022, 2006=100

250
202

200
151

150
115

100

100

106

100

100

84

87

101

114

63

50

0

Canada

US
2006

2011

UK
2016

2022

Sources: National sources: Bank for International Settlements 2023; Statistics Canada
2024b, Table 18-10-0005-01; US Bureau of Labor Statistics, various years; OECD 2024.

Tim Sargent | May 202431

UK, deflated by the all-items consumer price index in each country. Prices forresidential property, which includes condominiums and single-family homes,
have doubled since 2006 in Canada, with most of that increase coming since2011. This compares to quite modest increases in the US and the UK, wherereal property prices in 2022, although rising in recent years, were only slightly
above where they were in 2006 prior to the great recession.
These increases are clearly fuelling the perception that in Canada housing
is much less affordable for young people. Statistics Canada recently surveyed
young Canadians about this issue, and found that “in 2022, 32 percent of youth
said that they wanted to buy a home or move to a new rental but decided not tobecause of price concerns, compared with 20 percent of the overall population”(Statistics Canada 2023a).
This trend in higher housing costs is reflected in lower home ownershiprates. As Figure 19 shows, home ownership for younger age groups has declined
steadily since 2011, particularly for the youngest age groups. In 2011 44.1
percent of 25–29-year-olds owned their home, compared to only 36.5 percent
in 2021, a drop of 7.6 percentage points. For those aged 30–34 the drop was
6.9 percentage points.

FIGURE 19: Home ownership rates by age group, 2011, 2016, and 2021

80
67.1

70
59.2

60
50
40

44.1

39.6

55.0

71.0 69.0
63.5 61.5

66.8

52.3

36.5

30
20
10
0

25–29 years

30–34 years
2011

35–39 years
2016

40–44 years

2021

Source: Statistics Canada 2011, National Household Survey; 2019, Census Profile,
2016 Census; and 2023g, Census Profile, 2021 Census of Population (3901).

32

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

Time spent in higher education
Another potential explanation for lower couple formation and lower fertility
rates, especially among those in their 20s, is that young people are now taking
longer to complete their education and enter the labour market. This delay
postpones the time when they can afford to start a family and, at least for
women, uses up a significant part of their reproductive window.
Figure 20 shows the proportion of young people in different age groups
who are in education.3 For men there has not been a large change. In 2000
33 percent of men aged 20–24 were in education; this rose by 4 percentage
points to 37 percent in 2022. In 2022, 11 percent of men aged 25–29 werein education, the same percentage as in 2000. For women the picture is quite
different. The proportion of women aged 20–24 in education rose from 39
percent in 2000 to 51 percent in 2022: an increase of 12 percentage points. For
women aged 25–29, the proportion in education rose from 10 percent in 2000
to 16 percent in 2022, an increase of 6 percentage points.
It therefore appears that women are staying in education longer: it seems
plausible that this could have an impact on marriage and cohabitation rates,and particularly on childbearing. This is likely to be particularly true for the

FIGURE 20: Proportion of people in education by age group and sex, 2000–2022
60
50
40
30
20
10

20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22

0

men 20–24

women 20–24

men 25–29

women 25–29

Source: Statistics Canada 2023h, Table 37-10-0196-01.

Tim Sargent | May 2024

33

younger age group; the proportion in education in the 25–29 age group isprobably not large enough to have had a big impact on couple formation andfertility, although the latter would be more affected to the extent that women
want to spend a few years in the labour market before having children.
Mental well-being and attitudes about the future
The major life decisions that we analyze in this paper all depend not only on
immediate economic factors, but also on a person’s state of mind and his or her
expectations for the future. Since 2003 Statistics Canada’s Community Health
Survey has asked people describe their mental health status. The results areshown in Figure 21 (see page 35).
The results show a marked deterioration in mental health for younger age
groups, particularly for women. As recently as 2009–2010 women aged 15–30
had better mental health than older women, and about the same as men in
the same age group, with 76.5 percent reporting excellent or very good mental
health. By 2019 that figure had dropped 22.5 percentage points to 54 percent.
For women aged 31–46 there was also a significant drop of 10.1 percentage
points, from 72.8 to 62.7 percent. It is notable that these drops precede the
COVID epidemic, which put a further (although perhaps temporary) strain
on mental health.
There is no obvious economic explanation for this decline in mental
health. It is tempting to blame technology for these trends, particularly therise of smartphones and the consequent ubiquity of social media in young
people’s lives – trends that have also been observed in other countries(Twenge 2017).
The drop in mental health levels is accompanied by increased anxiety
about the future. Statistics Canada also tracks the degree of hopefulness about
the future. In 2016, 78 percent of Canadians aged 15–34 were always oroften hopeful about the future. However, by 2021–2022 that proportion had
fallen by 15 percentage points to only 63 percent (Statistics Canada 2022a).
Although this period coincides with COVID, more recent data suggests that
if anything the downward trend has continued, with the proportion of people
always or often hopeful dropping significantly for all age groups and both
sexes (see Statistics Canada 2023i, Table 13-10-0848-01).

34

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

FIGURE 21: Proportion of people reporting excellent or very good mental health

MEN
80
75
70
65
60
55
50

2003

2005

2007 to2008

2009 to2010

15 to 30

2011 to2012

2013 to2014

31 to 46

2015 to2016

2017 to201820192017 to20182019

47 or older

WOMEN
80
75
70
65
60
55
50

2003

2005

2007 to2008

15 to 30

2009 to2010

2011 to2012

2013 to2014

31 to 46

2015 to2016

47 or older

Source: Garriguet 2021.

Tim Sargent | May 2024

35

Number of children women desire
Another set of explanations for lower fertility is that women simply do notvalue childbearing as much as before, especially given the greater opportunities
available to women today. Lower fertility may simply be a result of individual
preference, and indeed if this were true it might well mean that women would
take longer to complete their education and be less inclined to become a couple
than would have been the case in the past.
One way to get at this issue is to ask women whether they are having as
many children as they desire. This was done recently in Canada by the research
institute Cardus. Cardus surveyed 2,700 women aged 18–44 and found thatwomen are having 0.5 fewer children than the 2.2 they would ideally like (Stone
2023). Furthermore, nearly half of women at the end of their reproductive
period indicate that they had had fewer children than they would have liked.
This group also reported lower life satisfaction than women who achieved theirfertility goals.
This result is consistent with data from the European Union. The OECD
(2016) looked at 22 EU countries (including the UK, at that point still amember), and found that while women’s average intended number of children
was 2.3, the actual number of children per woman was below 1.5. The OECD
found little difference by sex: the intended family size for men was only slightly
lower at 2.2 children.
Of course, results from these kinds of hypothetical questions have to beviewed with caution, particularly when asking about the intended number ofchildren, as views could change once the actual reality of the costs and benefitsof child-rearing are taken into account. Nonetheless, these results do suggestthat people still value having children: if every woman had as many children as
she wanted fertility rates would be a little above replacement rates. It seems that
other factors are reducing female fertility to well below desired levels.
Summary
It is hard to blame lower rates of family formation in Canada simply on higher
income or higher unemployment. While fertility does seem to be negatively
correlated with higher incomes, this cannot explain the recent rapid drop in
fertility in Canada, as incomes, including for women, have not shown any
particular change in trend. From an economic perspective, a more plausible

36

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Trends in family formation and fertility in Canada since 2001

culprit for lower family formation and fertility is housing. The increases
in housing costs in Canada over a 20-year period have been significant,both absolute and relative to other countries. Lack of affordable housing
unquestionably looms large for younger Canadians as a key barrier to moving
out of the family home and then having space to raise a family.
However, housing is unlikely to be the whole story, and, in fact, the data
do reveal a sharp decline in mental health and a significant rise in anxiety about
the future, beginning in the mid-2010s. These trends are particularly evident
for young women and may be linked to the changes in the broader social andcultural environment.

Conclusions, implications for public policy,
and next steps
Conclusions
This paper has looked at three key questions: whether individuals gain frombeing part of a family; the nature of the underlying trends in family formationin Canada; and possible factors that might explain these trends.
The answer to the first question is very clear: there are very significant
benefits to being in a family, both in terms of income and broader well-being.
•

An adult aged 25 to 34 in a couple has a standard of living one-third
higher than a single person.

•

A child in a two-parent family has a standard of living 50 percent
higher than a child in a one-parent family.

•

Married adults have higher longevity and better overall mental andphysical health than single adults.

•

Children raised by two biological parents do better than those raisedin one-parent families or in families with a step-parent.

Thus, the evidence is clear that the lifetime benefits from being raisedby two biological parents, and getting married and staying married, are very

Tim Sargent | May 202437

significant indeed for most people. However, despite these advantages, young
people in Canada are less likely to form couples and have children, and when
they do, a significant proportion of children will see the break up of their family.
Specifically, we find that:•

Young Canadians are delaying leaving home: One-fifth of adults(and one-quarter of men) aged 25 to 34 live with their parents,
and this proportion has been growing over the past 20 years and issignificantly higher than in the US or the UK.
•

Canadians are remaining single longer: Almost 60 percent of 25- to

29-year-olds, and a third of 30- to 34-year-olds, are single and havenever been married. This proportion has been growing over the past
twenty years and is higher than in the US or the UK.
•

Canadian women are having fewer babies: The fertility rate in

Canada has dropped to 1.3 children per woman, down from 1.6 only
six years earlier, because of a rapid decline in fertility among women
under 30. Canada now has the third-lowest fertility rate in the G7,
significantly lower than in Germany, the US, or the UK, and close
to Italy and Japan.
•

A high proportion of Canadian children no longer live with their
original parents: A third of Canadian children will see their original

families break up by the time they are 14. More than a quarter ofCanada’s children live in a one-parent family, significantly more thanin France or the UK, and more even than in the United States.
These trends are quite long-standing and are certainly not simply the
result of short-term economic and social disruptions such as those brought onby the COVID-19 pandemic. Looking at some of the potential explanations
we find that:38•

The economic position of young adults has not been deteriorating; ifanything, it has improved. Unemployment rates for 25- to 29-yearolds are at historic lows, and real median incomes for couples aged
25–34 have been rising.

•

However, young people are finding it harder to afford a house.
Housing prices have risen considerably since 2006, both relative
to other prices and to other countries, and in consequence homeownership rates are down, particularly for younger people.

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

•

Women are spending longer in higher education, although theimpact on family formation and fertility is probably not large. The
proportion of women aged 20 to 24 and 25 to 29 primarily engaged
in getting an education has risen significantly over the last 20 years.

•

The mental health of young people has deteriorated sharply, andanxiety about the future has risen significantly. Only half of women
aged 15 to 30 reported very good or excellent mental health,down from three-quarters 10 years previously. The proportion of
Canadians aged 15–34 hopeful about the future has declined by 15
percentage points since 2016.

•

Nonetheless, women still want to have children. Lower fertility does
not seem to be driven by children being less of a lifetime priority.
When surveyed, women say that they would like to have 2.2 children
on average, which is well above the current level.

Implications for demographic projections
Our results have significant implications for public policy, both from a positive
standpoint – the realism of assumptions being made about the future – and anormative standpoint – which issues policy-makers should be focusing on to
improve social welfare.
From a positive standpoint, our findings clearly suggest that government
agencies’ current assumptions about fertility rates in Canada are too optimistic.
For example, Statistics Canada’s population projections for Canada from 2021
to 2043 assume a fertility rate of 1.59 for 2043 in a medium growth scenario,
compared to 1.40 in a low growth scenario and 1.79 in a high growth scenario(Statistics Canada 2022b). In her 31st Annual Report, the Canada Pension
Plan’s (CPP) chief actuary assumes that fertility will rise to 1.54 by 2029 (Officeof the Chief Actuary 2022). Not only is the current fertility rate of 1.33 well
below even the most pessimistic of these scenarios, but our analysis suggeststhat the fertility rate will continue to fall. The younger generation that has not
yet hit peak childbearing age is composed of people who are even less likely toleave home, form a couple, and buy a house than the current generation.
If future fertility rates are significantly overestimated, this will have
implications for long-term economic and fiscal projections, both for pension
plans such as the CPP and for federal and provincial governments that are

Tim Sargent | May 2024

39

already facing significant pressures from population aging. Fewer children in
the population saves money in the short term, as it means less expenditureon schools and universities, but in the long run it means fewer taxpayers to
support health care, pensions, and long-term care for old people, and thus
higher taxes and contributions, either now or in the future. Lower birth rates
will reduce GDP per capita if older workers work less and if their productivity
falls (Maestas, Mullen, and Powell 2016).

Fewer people living in couples also
has implications for governments that
go beyond the impacts on fertility.
Fewer people living in couples also has implications for governments that
go beyond the impacts on fertility. As we outlined, single people have worse
mental and physical health, and have fewer people to turn to for help, implying
greater costs for home care and health care. Single people also earn less: to theextent that this reflects the impacts of being single on health or work incentives
rather than a selection effect, this earnings disparity implies lower output
growth and tax revenues.
Implications for public policy
Governments have every reason to worry about the trends in family formationand fertility we have uncovered in this paper. Not only do marriage andchildbearing very significantly benefit the individuals concerned, they also
benefit society and the economy overall. There are good reasons therefore tolook at policies that would promote families and that would try to ameliorate
the negative trends we are observing. Any such policy agenda would have toconsider all three life cycle events where we see negative trends: leaving home,forming a couple, and having children.
An exhaustive examination of what a such an agenda would look likeis beyond the scope of this paper. However, we can make a few observations
based on our analysis of some of the underlying factors.

40

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Trends in family formation and fertility in Canada since 2001

Housing policy

An obvious area of focus is housing, which affects all of the three key life
cycle events crucial to family formation. Policies to reduce the relative priceof housing – of all kinds, including rental apartments and condominiums but
particularly single-family homes – would make it cheaper and easier to leave
home, to settle down with a partner, to have a first child, and to have secondand subsequent children. Anxiety about housing is clearly weighing on theminds of young Canadians: significant changes in housing affordability would
be required to change this mindset.
Making housing more affordable is currently a topic of intense debate
in Canada. The significant appreciation of house prices has been driven bystrong demand, attributable to lower interest rates and high immigration,
and weak supply, attributable to strict zoning requirements, lengthy approval
processes, shortage of skilled labour, and low productivity growth in residential
construction. Policy action to make housing more affordable is complicatedbecause all three levels of government – federal, provincial, and municipal –have potential levers at their disposal. At the provincial and municipal level
initiatives could include allowing more land to be zoned residential, allowing
higher density housing, simplify and shortening application times, and reducing
and simplifying building codes. At the federal level, there would need to be abetter matching of immigration levels, both permanent and non-permanent, tolikely housing supply.
Within an overall housing affordability agenda there might be a role forgovernments to play by ensuring that developers are building housing that canaccommodate couples and families. This means ensuring there is an adequate
supply of single-family homes – perhaps by insisting that municipalities open
up sufficient land for new subdivisions, and not charge excessive amounts for
new infrastructure such as water and sewer connections – and by requiring new
multi-family units such as condominiums to have a certain number of three- or
four-bedroom units that are suitable for families.
It is also possible to have tax relief or subsidies that would assist couples
and families to buy houses. The challenge with these kinds of policies is thatunless supply becomes more elastic, these policies will simply increase prices
and would largely benefit current homeowners. Initiatives to construct social
housing will likely run into the same problems, to the extent that they use up
the supply of buildable land and increase demand for scarce skilled trade labour.
Tim Sargent | May 2024

41

Tax and transfer policies

One policy tool governments have that can directly affect people’s choice toform a couple and have a family is the tax system. In Canada the tax systemis largely neutral with respect to whether an individual is married or single,
particularly if both people are working. There is an allowance for a dependent
spouse although this is a credit, not a deduction. Unlike in the US there is
no provision for joint filing, although there is some ability to shift tax credits
within the couple. One consequence of this approach is that because of Canada’s
progressive tax system, a couple where one partner earns a higher income andthe other a lower income, perhaps because one of them works part time, will pay
a higher average tax rate than if both earned the same amount. One approachfor dealing with this issue is income splitting, which allows the higher earnerto transfer income to the lower earner in order to have the income taxed at alower rate. Not only would this provide an incentive for people to form couples(or marry if this provision were made conditional on marriage), it would also
make it easier for one partner to take time off to look after children, providing
an incentive for higher fertility. Canada had a version of this approach until
2016 (the non-refundable income splitting tax credit for couples with children
under 18).
The tax system can also be used to provide direct support for families withchildren. Canada has a tax credit for dependent children: this could certainly be
extended, or turned into a deduction. Canada also has a deduction for childcare
expenses, which is claimed by the lower income earner. Some countries havegone much further in their attempts to give incentives to families to have morechildren: Hungary has exempted women who raise four or more children fromincome tax for the rest of their lives (Albert 2020).
Governments can also provide direct support to families throughtransfers, which are often delivered through the tax system (indeed, thedistinction between a tax measure and a transfer measure can become quite
blurred). In 2016 Canada introduced the Canada Child Benefit, which
provides a significant monetary benefit (up to $7,400 per child at the timeof writing) to the primary caregiver and replaces the earlier and less generous
Universal Canada Child Benefit. Although the benefit is not taxable, it isdependent on income, and is reduced for higher income families. The amounts
are the same for each child. An alternative and less costly but possibly lesseffective approach is to condition transfers on birth order, so that second and42

DECLINE AND FALL

Trends in family formation and fertility in Canada since 2001

subsequent children receive a higher transfer amount. Quebec adopted thisapproach between 1988 and 1997 in its Allowance for Newborn Children(Milligan 2005): the program paid $500 for the first child, $1,000 for thesecond child, and $8,000 for the third child and any subsequent children.
Similar programs have been introduced in other countries such as Poland(Stone 2020).
Finally, policies that address parental leave can also make it financiallyeasier to have children, assuming that a parent wants to stay home with a
new baby. Canada’s employment insurance program provides up to a year ofleave (15 to 18 weeks for the mother; the rest can be taken by either parent),
with benefits paid at 55 percent of insured earnings. Both the duration andgenerosity of benefits could be increased to allow parents to spend more timewith their new child.
Childcare policies

Subsidized daycare policies can encourage women to have children, as
subsidized daycare enables women to (re)enter the workforce more easily after
the birth of a child. In principle this should help increase fertility and boost
tax revenues. However, the question from a policy perspective is whether thoseresources might have more impact if they were simply given to women with nostrings attached. If many women actually prefer to stay home with their young
child, then a transfer along the lines of those discussed in the previous section,
which could be spent on child care if desired, would be more attractive to some
women and thus have more of an incentive effect.
Education policy

As we have seen, young people are staying longer in higher education than in
the past, which is likely delaying family formation and fertility. While there
are obvious benefits to having a more skilled workforce, it may be that part ofthis trend represents increased credentialism, with employers valuing higher
education as a sorting mechanism rather than for the intrinsic value of what has
been taught (see Caplan 2018). To the extent that this is true, finding ways toreduce the formal educational requirements for jobs would allow young people
to marry, afford a house, and have children earlier.

Tim Sargent | May 2024

43

Next steps
The literature on the benefits of being in a family is reasonably conclusive;
although most of it pertains to other countries, particularly the US, there islittle reason to believe that the results do not reflect the reality in Canada,
especially given our analysis of the income data for Canada.
Where there is more work to be done is on the factors behind the declines
in family formation and in fertility. We could break the phenomena down by
province: it might be particularly interesting to see if trends are different inQuebec given its unique culture and higher rate of common-law relationships.
The data are also available by immigration status, a dimension that is also
relevant given Canada’s current high immigration levels. Researchers could also
do more cross-country comparisons: we have largely confined comparisons inthis paper to the US and the UK, two countries culturally similar to Canada,
but this could be extended to other OECD countries that have quite different
tax and family policies. We could also do more cross-country comparisons of
the trends in fertility rates over time.

If we could better understandthese trends we could
project future fertility rates.
If we could better understand these trends we could project future
fertility rates. As noted earlier, we think that current projections of fertility
rates, and therefore of measures such as old age dependency ratios, which are
key determinants of fiscal planning, are too optimistic. It would be useful tounderstand what more realistic projections might mean for governments’ longterm fiscal projections. As a recent paper by Morland and Pilkington (2023)
did, we could also calculate what immigration rates would have to be if agovernment wanted to offset the impacts of lower fertility on dependency rates.
Finally, there is clearly much work to be done on the details of any policy
agenda that attempts to address the trends in family formation and fertility.
Given the close relationship between marriage and fertility, this agenda
would need to focus on policies that address both these issues, recognizing

44

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Trends in family formation and fertility in Canada since 2001

that the causality potentially runs in both directions. Given the complexityand deep-seated nature of these issues, such a policy agenda would need touse the full range of policy tools, from housing policy, tax and transfer policy,
and education policy, and carefully consider the international experience inthis area. It is likely that these trends reflect not only economic factors, butalso more deep-seated cultural and social trends that are not easily influenced
by economic policies. However, the most important step in addressingthese problems is perhaps the first, which is to recognize that the declining
family formation, dropping marriage rates, and deteriorating fertility areserious problems facing our society, and they should be a top priority forpolicymakers in our country.

Tim Sargent | May 2024

45

About the author
Tim Sargent is the Deputy Executive Director of theCentre for the Study of Living Standards and aDistinguished Fellow at the Centre for International
Governance Innovation. He holds a Ph.D. in Economics
from the University of British Columbia.

46

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Trends in family formation and fertility in Canada since 2001

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Endnotes

54

1

Shift-share analysis decomposes a change in a given variable into the partthat is due to changes in composition, holding constant the behaviour ofthe component groups, and the part that is due to changes in behaviour,
holding constant the composition of the population.

2

Including all children of all ages gives 24.2 percent living in one-parent
families in the UK, still well below the comparable Canadian proportionof 28.2 percent of children of all ages living in one-parent families
in Canada.

3

Note that the data do not allow us to distinguish between the people whohave essentially embarked on their careers and are simply taking a few
courses in the evening, and students in who are still in full-time education
and who are working part time. These numbers therefore represent an
upper bound on the proportion of people who are still focussed on theirstudies rather than full-time employment.

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excellent
T HOUGHT-PROVO K I N G
Canada shall be the star towards which all men
who love progress and freedom shall come.

high-quality

CONSTRUCTIVE– Sir Wilfrid Laurier

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The Macdonald-Laurier Institute focuseson the full range of issues that fall under Ottawa’s
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