The government has a dilemma. It wants to maintain Britain’s birthrate and ministers trumpet the fact that in comparison with other European countries the numbers — and hence future population prospects — are holding up well.

But official policy is also to reduce the number of teenage births; Britain is close to the top of the international league table. The dilemma is that the more successful the government is in this area, the more it will have to accept a low birthrate and a natural population decline.

The other dilemma is that the more population growth is achieved through single mothers, particularly teenagers, the more it is at a cost — to the taxpayer.

New research from the Institute of Social and Economic Research (ISER) at Essex University shows that so-called “early breeders” — women who give birth before the age of 22 — suffer a permanent economic disadvantage.

The ISER, which uses data from the British Cohort Study of 1970 and other household figures, tracks the same group of people through their lives. They looked at what had happened to the “early breeders” and found that those who lived in their own homes had houses worth on average 25% less than mothers who had started families later.

The figures, adjusted for income differences — the raw figures showed a bigger disadvantage — suggest, according to the report’s authors, that early childbirth casts a “long shadow” over people’s subsequent lives.

“The impact on housing and wealth is felt well into middle age and probably into retirement,” said Professor John Ermisch of the ISER. “If you have kids early it takes years longer to build up wealth.”

It is also the case that children born to young single mothers are likely to stay near the bottom of the ladder. Other research by the ISER shows that children born to young single mothers do less well educationally, tend to be physically smaller and are less likely to have had the influence of a father figure by the age of 10.

What this means in practice is that the early breeders turn to the state. Teenage mothers who go on to own property are unusual. Official figures show that half of single mothers live in social housing — council or housing association property — according to the Office for National Statistics. A further 20% live in private rented accommodation and lone parents are five times as likely as couples to be receiving welfare.

“We are talking here about single mothers, because few women under the age of 22 are giving birth while in settled relationships,” said Jill Kirby of the Centre for Policy Studies, author of a recent pamphlet, The Price of Parenthood.

More than 90% of births to mothers aged under 20 were outside marriage in 2003, the latest year for which figures are available. For 20-year-old to 24-year-old mothers,the figure is 65%. In total more than 3.2m children are being brought up by lone parents.

Britain’s “natural” population increase, excluding immigration, measured by the number of births less annual deaths, has averaged 78,000 per year in the past decade; in 2003 the increase was 83,215. Without the 120,000-a-year births to young unmarried mothers, however, Britain’s population would be in decline.

“We are getting this huge polarisation between births outside marriage to young women, and later birth among women in settled relationships,” added Kirby.

According to Ermisch, this is one factor that sets Britain apart from other countries in Europe.

“If you look at Italy, where there is a serious problem of population decline, the average age for giving birth to the first child is now 30,” he said.

Young single mothers are the only thing protecting Britain from that fate. Professional women are delaying childbirth until their careers are established. Building up a home and a solid foundation takes priority over early childbirth.

But for early-breeder single mothers there are few such constraints. For teenagers, the lure of childbirth is partly the economic independence it can bring, courtesy of the state. As it is, the average birth age for mothers has increased from 28.1 to 29.4 in the past decade.

Without young unmarried mothers to keep the average age down, Britain would be in a similar position to Italy. The average age of births within marriage is now 31.2, while for first births it is 29.9.

What should the government do? One trend that appears unstoppable is the rise in the proportion of births outside marriage, which climbed to 41% in 2003. In Wales and the northeast, more than 50% of births were to unmarried mothers, for the first time. Kirby, as she wrote in The Sunday Times last month, argues that the only way to turn the tide is to increase the financial advantages for having children within marriage for lower and middle-income groups.

Births to married women in these groups have dropped by more than 40% in the past three decades. She argues that the tax and welfare system is dangerously skewed towards single mothers, and needs to be tilted back urgently.

It may be too late. While births to professional married couples have held up well, because they can afford to overcome the bias in the tax and welfare system, it would take a huge shift to alter existing childbirth trends among the less well-off.

The government’s declared policy is to cut down on the number of young single mothers, even though it has done little to bring that about. It is also determined to maintain Britain’s birthrate, to stave off the problems of an ageing population.

Not for the first time, the two may be incompatible.