Latest / The Demographics Podcast with Fexingo: Aging Populations, Birth Rates, and Economic Impact / How Falling Birth Rates Are Fueling the Fertility Treatment Boom
Transcript
- Lucas: You know, when we talk about falling birth rates, the obvious assumption is that fewer babies means less business for anything baby-related. But there's one industry where falling birth rates are actually driving explosive growth. Luna: I think I know where you're going with this. Fertility treatments? Lucas: Exactly. The global fertility services market was worth about $25 billion in 2023, and some projections have it hitting over $50 billion by the early 2030s. That's a compound annual growth rate of nearly 10 percent. Luna: So the same demographic trends that are emptying playgrounds are filling IVF clinics. How does that work exactly? Lucas: It's a combination of factors. First, people are delaying childbearing — the average age of first-time mothers in the U.S. has risen from 21 in 1970 to 27 in 2024, and it's even higher in places like South Korea and Japan. As women get older, the likelihood of needing assisted reproductive technology goes up significantly. Luna: Right, because fertility declines with age. So the same trend that drives birth rates down also drives demand for IVF. Lucas: Precisely. And it's not just IVF. Egg freezing, which was once a niche service, has become almost a standard employee benefit in some industries. In 2024, over 20 percent of large U.S. employers offered fertility benefits, up from maybe 5 percent a decade earlier. Luna: That's a huge jump. And those benefits aren't cheap. A single IVF cycle in the U.S. can cost anywhere from $12,000 to $25,000, and most people need multiple cycles. Lucas: Exactly. So you've got this perfect storm: more people needing treatment, more employers covering it, and the market just explodes. The number of IVF cycles performed annually in the U.S. has more than doubled over the last decade. Luna: And it's not just the U.S. Globally, countries with the lowest birth rates — like South Korea, Japan, Italy — are seeing the fastest growth in fertility clinic utilization. South Korea's total fertility rate is something like 0.72, the lowest in the world, and yet it's one of the biggest markets for IVF. Lucas: That's the paradox. In South Korea, nearly 1 in 40 babies is now born through IVF. The government has actually expanded subsidies for fertility treatments to try to boost birth rates. But the irony is that the treatment itself doesn't necessarily increase the overall birth rate by much — it mostly helps older women have the one or two children they were already planning to have. Luna: So it's more of a redistributive effect? People who would have had zero children now have one or two, but couples who would have had three or four are having one or two without treatment. Lucas: Right. The net impact on the total fertility rate is small. But the financial impact on the healthcare sector is enormous. Let me give you a concrete example. A company called Progyny, which manages fertility benefits for employers, has seen its revenue grow from about $300 million in 2020 to nearly $1 billion in 2025. Their stock has been a standout in the healthcare services space. Luna: And that's actually a useful lens. Because if today's episode is helping you think about how demographic shifts create investment opportunities or just understand the economy better, the way these conversations stay ad-free is listener support. You can find us at buy me a coffee dot com slash fexingo. It's a small gesture that keeps this show independent. Lucas: Yeah, absolutely. We're grateful for everyone who chips in. Back to Progyny — they've basically become the middleman between employers and fertility clinics, and they've been able to negotiate better prices while expanding access. That's a business model that only works because of these demographic tailwinds. Luna: So the fertility treatment industry is benefiting from falling birth rates, but what about the broader healthcare system? Does this shift any other parts of the economy? Lucas: It does. One interesting ripple is in insurance. As more employers cover IVF, we're seeing a shift from traditional fee for service models to value-based arrangements where fertility clinics get paid per live birth rather than per cycle. That aligns incentives, but it also puts pressure on clinics to be more efficient. Luna: And there's the ethical dimension. Fertility treatment is still incredibly expensive, and access is uneven. If you're in a state with mandated coverage, like Massachusetts, you might pay little out of pocket. But in other states, it's mostly a luxury for the wealthy. Lucas: That's a real tension. The countries with the most generous public funding for fertility treatment — like Denmark, which covers up to six IVF cycles — also have some of the highest IVF utilization rates. But even there, the birth rate remains low. So public spending on fertility treatment is rising without reversing the demographic decline. Luna: It's almost like fertility treatment is a coping mechanism for delayed childbearing, not a solution to the baby bust. Lucas: Exactly. And that's why I think this industry will continue to grow even as birth rates stay low. The demand is structural. Women are having children later, and that's unlikely to reverse. So the fertility treatment market is one of those rare sectors where demographics are a tailwind, not a headwind. Luna: What about the innovation side? Are we seeing new technologies that could make treatment cheaper or more accessible? Lucas: Yes. There's a lot of investment in AI for embryo selection, which could improve success rates and reduce the number of cycles needed. There's also progress in in-vitro maturation, where eggs are matured in the lab, potentially lowering costs. But these are still early-stage. For now, the industry is riding the wave of demographic demand. Luna: So if I'm an investor, or just someone trying to understand where the economy is heading, the fertility treatment boom is a clear signal about how societies adapt to low birth rates. Lucas: Absolutely. It's a reminder that demographic trends don't just kill industries — they create new ones. And in the case of fertility, they're creating a multi-billion dollar market that's still in its early stages. I think we'll look back at this period and see it as the golden age of reproductive technology, precisely because birth rates forced the issue. Luna: It's fascinating, and a little sobering. Next time, maybe we can look at another unexpected beneficiary of the baby bust — the pet industry we touched on in a previous episode, or maybe the funeral industry from a different angle. Lucas: Good ideas. For now, thanks for joining us on The Demographics Podcast. We'll be back next week with another angle on how population change is reshaping the economy.