In an interview with Vikerraadio, Bigbank chief economist Raul Eamets urged political leaders to act immediately, citing what he called a "demographic math problem."

"We have a very short window of opportunity right now and we should make the most of it. Five years from now — or worse, ten years from now — if we wake up then, it'll already be hopeless," Eamets warned.

According to Eamets, after that, a very small birth cohort from the 2000s will reach childbearing age, meaning the number of potential mothers will drop by half.

Eamets stressed that the falling birth rate should not be viewed solely through an economic lens. While fewer taxpayers will strain the pension system, the more pressing issue, he said, is national defense.

"If we don't have young men to send to the military, who are we buying and building weapons for?" he asked, estimating that based on current birth rates, the armed forces could be short about 2,500 men in 18 to 20 years.

To reverse the trend, Eamets suggested helping people move out of cities, pointing to economic geography studies showing higher birth rates outside major urban centers.

"When we cram people into tight city apartments, birth rates are always lower," he explained. In his view, a detached house and a safe yard environment encourage families to have more children.

He also called for state intervention in regional policy, including support and better loan conditions for homebuilding outside large cities — something that would also benefit national security if more people lived in areas like Setomaa.

Eamets said Estonia should actively encourage families to have a third child.

"That's something some political parties have tried to do. But then it gets rolled back and maybe later reversed again. This kind of back-and-forth undermines confidence. If we've agreed on family policy measures, they should stay in place for a while because children aren't born overnight — it takes planning. We need stability," he said.

"Of course, the economic side matters, but so do housing, a sense of security, finding and trusting a partner, health... There are many factors and we know them — there's been plenty written about this. Now we just need to start working through the issues one by one," Eamets added.

Among other proposals, he mentioned paying parental benefits to grandparents and offering tax incentives.

"Indrek Neivelt and Heido Vitsur have floated the idea of paying a wage for raising children. Anyone who's raised kids knows it's a full-time job and we don't compensate it as such. There are many possible solutions: paying parental benefits to grandparents who help care for kids, extending this to aunts and uncles, adjusting income tax rates based on the number of children," the economist said.

"There are many measures. We just need to start implementing some of them. On the bright side, when I listen to political talk shows, it's no longer just one party's issue — it's starting to resonate across the political spectrum. Demographics is now one of the most serious challenges and I sincerely hope it becomes a core issue in the next parliamentary elections, with parties competing over solutions to boost birth rates," Eamets said.

While technology and automation can help the economy cope with a shrinking workforce, they won't replace people as cultural carriers. "To preserve the Estonian language, we still need people who speak it," Eamets noted.

Immigration, in his view, offers only temporary relief.

"Experience shows that immigrants quickly adopt the local low birth rate patterns and those coming from farther away often have low employment rates," he said.

Looking ahead, Eamets recommended considering a model similar to Finland's, where social care workers are recruited and trained from countries like Thailand — learning the local language before arrival.

"Estonia likely can't manage entirely without immigration," he said.

According to preliminary data from Statistics Estonia, as of January 1, 2026, the country's population was 1,362,954 — a decrease of 7,041 from the year before. In addition to a negative natural birth rate, net migration also turned negative: 11,298 people arrived, while 12,004 left based on registered migration figures.

--

Follow ERR News on Facebook and X and never miss an update!