An Agent-Based Simulation Approach to Investigate the Effect of Decreasing Birth Rates and the Efficacy of Potential Solutions

Decreasing fertility rates are a great threat to industrialized nations and it remains to be seen which actions are suitable to address this problem long-term. COBWEB, an agent-based modeling software, was used to simulate how decreasing fertility and aging would affect an arbitrary country if no preventive measures were taken. Additionally, the effect of a range of potential policies that attempted to increase fertility rates was observed. Each of these was repeated ten times, and to assess their efficacy, Mann- Whitney U tests for the short-term effect and calculated Pearson correlation coefficients for long-term significance were used by comparing the potential solution with the baseline scenario. The results suggest that environmental policies should only be implemented as temporary short-term fixes, whereas immigration is a viable long-term solution. Additionally, the success of financial incentives depended on how they are implemented: Direct financial incentives yielded similar results to the environmental policies, but indirect financial policies (improving healthcare and childcare services) were shown to be effective in the long term. Policymakers can consider these results when deciding how to approach this demographic problem.

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