This is because the problem is cultural and even religious (feminism, secularism, atheism, cultural rot, etc.) not economic.
Hence, those incentives have favored, in places like France or the Netherlands, the demographic growth of non-native populations boosting their birthrates as long as they don't partake the cultural rot the pervades the current western civilization (first and second generation muslim arabs, first generation turks, etc., first gen muslim Africans).
What you point out is more important than many here (and elsewhere) think. Not only a religious revival is necessary but a cognitive revival as well.
Indeed, a cultural, religious, spiritual, and cognitive revival. This is a theory that I have had floating around in my head for some time. That the western atheistic civilizational model is doomed to collapse sooner or later, whether by declining birth rates, ecological deterioration, transhumanism, or something else ... and it will drag down those people who are participating in the same frequency as itself. People succumb to the false ideology of westernism, or wokeism, or corporate consumerism, whatever you want to call it ... and eventually get as you say, "fertility potential diminished or destroyed".
The widespread of pesticides and toxic chemicals, family dysfunction, deforestation, and societal degradation ... are all but symptoms of an underlying disease in society which is the abandonment of traditional civilization, and acceptance of a new non-traditional modern western civilization, with all the worldview, behaviors, and all the rest of the baggage.
The underlying problem is basically atheism, the root of which is a rejection of nature. And any society which does not live in harmony with the laws of nature is doomed to collapse sooner or later. As Lao Tzu said, "one must go with the flow". My interpretations is that man shall not try to become in place of God. Man shall not attempt to modify the environment to his desire, GMO, change the sex that kids have when they are born. It is all a rejection of nature, and a rejection of God, and a rejection of objective reality. Western civilization knows about the laws of physics, but there are also philosophical, metaphysical laws which are omnipresent.
For all it's wealth and power, even China is headed for a demographic fall in perspective. While the reason maybe simply because traditional Chinese culture places more value on boys (as bread bringers) than girls, resulting in a sex disbalance, not a small part plays the transition of China into a "Western civilization", even if it is against "The Collective West" politically, the megacities, architecture, pollution, etc, bears witness to a cultural change within the Chinese civilization for worse, in my opinion.
See my critique of western civilization here:
Killing saves lives. That's the Modus Operendi the US has operated under abroad for at least 70 years. Why did we kill a million Iraqis? To keep us safe. Why did we wage wars and kill countless others in dozens of countries all over the globe? The bizarre notion is that by murdering...
www.rooshvforum.com
Sorry for all the maybe somewhat incoherent words.