In honor of the legacy and contributions of renowned Journalist and Columnist G.Otgonbayar, we present to our readers an article by O.Bat-Undrakh, a journalist at Unuudur newspaper, which was selected as one of the best 15 works of 2026 competition organized by the Otgonbayar Foundation.

Mongolia’s population growth has slowed and reached its lowest level in the past 20 years. Doctors and researchers have offered various explanations for the declining birth rate, with many attributing it to air pollution, health issues, and inadequate education and healthcare services. However, these explanations are merely superficial. The old saying that “a child comes with its own food” has long become obsolete. Parents are well aware that the average cost of raising a child has increased significantly. Meanwhile, government support does not even cover one percent of these expenses. As a result, many families are unwilling to contribute even “a finger’s worth” to population growth.

Moreover, declining birth rates are not merely a household issue. This is a phenomenon that could disrupt the fundamental balance of the macroeconomy and pose serious risks to a country’s long-term policy, strategy, economic growth, labor market, and fiscal stability. Unfortunately, there appears to be a lack of policymakers and officials in our country who are attentive enough to recognize, discuss, and think critically about this issue.

In any country, once population growth begins to slow, it typically leads to pressure on the labor market within 10 to 20 years, on fiscal stability within 30 years, and on the pension system within 40 years. In short, if birth rates decline today, the economy will contract tomorrow. Based on current birth statistics, Mongolia’s key economic indicators may begin to fluctuate in the next 10 to 20 years.

20-year stable level dropping  

In 2025, 56,695 children were born nationwide, a decrease of 3,500 (or 5.8 percent) compared to the previous year. As a result, the natural population growth rate declined by 8.1 percent year-on-year, according to the National Statistics Office (NSO).

Looking at the past decade, birth rates peaked in 2015, exceeding 82,000. However, since 2019, they have steadily declined, and the natural population growth per 1,000 people has now reached its lowest level in the past 20 years.

According to projections by NSO, Mongolia’s population was expected to reach four million by 2033 and five million by 2047–2048. However, if the declining birth trend continues, these milestones may be delayed by five to six years. Furthermore, the total fertility rate, which is currently at 2.63 births per woman, is projected to fall to 1.96 by 2054, according to a United Nations report. Notably, while this figure remained above two for 20 years since 1994, it is now clearly on track to drop toward one over the next 30 years.

Who will fill the labor market gap? 

Another fact demonstrating the close link between birth rates and the economy is worth noting. Mongolia previously experienced a sharp decline in birth rates between 1995 and 2005, during a period of severe economic hardship. During those years, annual births averaged between 45,000 and 54,000. Although those individuals are now in their prime working years, the labor market is already experiencing workforce shortages, a direct consequence of that earlier demographic “gap”.

If birth rates continue to decline at the current pace, the population structure will shift rapidly in the short term: the number of young people will decrease, while the proportion of elderly citizens will rise. In economic terms, this means a reduction in the labor force proportional to the decline in births.

Population growth may not seem like an urgent issue today. However, as noted, its long-term impact on the economy is clear and carries significant risks. When the labor force shrinks, three main consequences typically arise. First, labor shortages emerge across many sectors, including production and services. Second, wage pressures increase, and ultimately, small and medium-sized enterprises lose competitiveness. As a result, real economic growth slows, rural areas and residential zones become depopulated, and schools and kindergartens begin to close.

Such conditions have already begun to appear in several countries. Japan, for instance, is currently experiencing this process firsthand. Since the 1990s, declining birth rates and rising life expectancy have placed significant strain on its labor market. Today, people aged 65 and above account for about 30 percent of the population, while the working-age population continues to shrink. Consequently, Japan’s economy has stagnated for decades. Mongolia’s labor market is also beginning to “empty out”, yet it remains unclear who will fill this gap.

If workforce shrinks by 15-20%, budget revenue will decline accordingly  

There is no economy without health, and no health without an economy. Similarly, as the labor market contracts, a decline in government revenue is inevitable. A significant portion of the state budget is derived from value-added tax (VAT), personal income tax, and social insurance contributions—all of which depend directly on the number of employed citizens.

Researchers estimate that one percent decrease in the working-age population results in an average 0.8 to 1.2 percent decline in tax revenue. According to projections, if the workforce decreases by 15 to 20 percent by 2045, government revenue will fall proportionally.

At the same time, as the number of elderly people increases, expenditures on pensions and healthcare will also rise. South Korea provides a clear example. As one of the countries with the lowest birth rates in the world, it has spent over 200 billion USD since 2006 to support population growth. Nevertheless, the results have been limited, with the total fertility rate falling to around 0.7.

As a result, South Korea is now implementing a range of measures to reduce future fiscal pressure, including pension reforms, immigration policies, and efforts to increase female labor force participation. They understand that the longer the delay, the higher the cost will be.

Cost of raising child reaches 200 million MNT  

Policies to support childbirth and population growth have long been neglected in Mongolia. In reality, however, people rarely fully understand, notice, or discuss how much it actually costs, both for families and society, to raise a child, educate them, and prepare them for the labor market.

For an average-income household whose child attends public kindergarten and school, the total cumulative cost of raising a child from birth to age 22, including household expenses and public expenditures on education, healthcare, infrastructure, and social services, could reach between 150 and 190 million MNT. This figure increases significantly if the child attends private schools or studies abroad.

Breaking it down, from ages zero to two, expenses related to pregnancy and childbirth (medications, tests, monitoring, and additional services), along with diapers, milk, food, clothing, supplies, childcare, and medical treatment when needed, can cost at least eight to 10 million MNT per year, or over 20 million MNT over two years.

Between ages three to five (kindergarten years), expenses for food, clothing, school supplies, additional kindergarten fees, holiday events, and healthcare amount to approximately six to eight million MNT per year, or 18 to 24 million MNT over three years.

Costs rise even further during schools. Expenses such as school supplies, uniforms, meals, transportation, extracurricular activities, sports, foreign language courses, clothing, mobile phones, internet, and healthcare can total eight to 12 million MNT per year. Over 12 years, this amounts to roughly 96 to 144 million MNT. Adding four years of university tuition brings the total real cost of raising and “supplying” one child to society to over 200 million MNT.

Of course, parents make the decision to have children with these realities in mind. Individuals raised at such cost are likely to contribute even more to their country. It is estimated that an average-income citizen, over their working lifetime, can generate at least 300 to 500 million MNT in direct and indirect tax revenues for the state.

Therefore, the most effective solution is to support families in order to “lift” the birth rate curve and accelerate population growth.

One-time cash benefits do not sustainably increase birth rates 

There are many reasons why couples are reluctant to have children today. Rising housing prices, strict loan conditions, inflation, air pollution, unequal access to healthcare and education, insufficient availability of schools and kindergartens, unstable work and living conditions, low wages, and high tax burdens with limited support all play a significant role.

Globally, birth rates have steadily declined since the COVID-19 pandemic, and many countries are already addressing this issue. Unlike Mongolia, they are implementing concrete and effective measures.

International experience shows that one-time cash benefits do not sustainably increase birth rates. Instead, long-term and stable support measures are more effective. These include expanding access to childcare services, promoting work-life balance, supporting and protecting women’s employment, providing affordable housing loans, and reducing housing costs.

France is one of the countries that has managed to maintain a relatively stable fertility rate of around 1.8. This is because of over 30 years of consistent and systematic implementation of family and population policies. Scandinavian countries offer accessible childcare services, strong welfare systems, and secure labor markets. As a result, women actively participate in the workforce, and policies ensuring child well-being are comprehensive and effective. Singapore has also pursued long-term policies in three main areas to support childbirth.

In contrast, Mongolia lacks policy continuity. Policies are often inconsistent, short-lived, and tied to political cycles. However, there is no reason why population policy and strategy cannot be planned over a 40-year horizon rather than just four, and implemented in structured phases.

Programs such as the monthly 50,000 MNT allowance for “paid mothers” and the annual 200,000 to 400,000 MNT awarded through the “Honored Mother” medal cannot be considered effective population growth policies, this would be a major misconception.

Although having children may seem like a personal choice, from a national perspective it is a strategic issue of great importance. Every Mongolian citizen is the country’s most valuable asset—future taxpayers, members of the workforce, and creators of innovation.

If the government does not place childbirth policy at the center of its agenda now, it may eventually be too late even if large amounts of money are spent later. Ultimately, Mongolia’s future economic trajectory will be determined by its population size.