Thought of the Day: US Births, Positives Outweigh the Negatives

Thought of the Day: US Births, Positives Outweigh the Negatives

In the long term, as John Maynard Keynes once wrote, we are dead. But it is also true that over the long term economic growth depends upon on an expanding population. Historically, the United States has been unique among developed countries in the West in maintaining birthrates in excess of what’s needed to prevent the population from declining. An abundance of births has provided the fundamentals needed for long term economic growth.

However, that may be changing. According to a recent Pew Research survey, birthrates in the U.S. have reached their lowest levels since at least 1920. The numbers indicate a birthrate of 63.2 per thousand women of childbearing age (15-44). In 1990, the number was 71 per thousand. The peak year for births in the U.S. was 1957 when the comparable number was 122.7. The National Center for Health Statistics shows that the U.S., in 2010, had a TFR[1] of 1.89, which is below the replacement rate and the lowest since the 1970s. In 2011, the TFR in the U.S. was below that of France and the UK.

In accordance with declining birthrates, the population of the United States is aging, with a median age in 2011 of 36.8, compared to 32.9 in 1990. That increase in age is manifested in the decline in the number of workers per retiree. In 1965, 81 million workers paid for the benefits of 20 million people – a ratio of 4:1. Today that ratio stands at 2.8:1. If current trends persist, that ratio is expected to drop to 2:1 in 2035, with 186 million workers expected to pay for 91 million retirees.

This trend has obvious negative implications for Medicare and Social Security. It is what has been driving politicians like Paul Ryan to address the needs of these programs before they financially collapse. Taken to extremes, very low birth rates cause declining economic growth. Ted Fishman, who wrote of the expected rise of the next superpower in China, Inc, writes in Shock of Gray: “A low birthrate could be a recipe for mass poverty and isolation.”

Given economic conditions, even after three and a half years of “recovery,” it is unsurprising that birthrates in the U.S. have declined. A chart depicting birthrates over the past century show similar declines in times of economic duress, especially during the 1930s and 1970s. What is surprising, and what provides a reason for cautious optimism, was the far more dramatic drop in births among teenagers, immigrants, along with an increase in births among college-educated, older mothers.

According to the same PEW study, birthrates for women aged 15-19 fell to 34.3 per 1000 in 2010, the lowest level ever recorded, and it fell across all race lines. The study also showed that the number of immigrant women giving birth fell 14% between 2007 and 2010, while Mexican women (the nation’s largest immigrant group) saw births drop 23 percent. At 87.8 births per 1000, foreign born women still give birth to more children than their native born counterparts. In 2010, immigrant women gave birth to 23% of the nation’s babies, while making up 17% of the country’s female population. Nevertheless, the trend suggests that poorer, less educated women are adapting to changing circumstances, be they economic or lifestyle choices.

Confirming the fact that women are delaying raising families, birthrates among women in the age category 30-34 (97.5 per 1000) exceeded those of women in the 20-24 (96 per 1000) age group for the first time. Writing last January, before the release of the Pew study, Samuel Sturgeon, director of research at Demographic Intelligence[2], noted a rise in birthrates among college educated and older women, especially among those who can afford to be stay-at-home mothers. I found that interesting, as it supports the anecdotal evidence from observing my own children and their friends living in suburbs outside New York.

The principal reason these positive trends have developed has been a virtual universal adoption of birth control. Sandra Fluke’s argument not withstanding, the cost of birth control is not beyond the means of most people. Additionally, there has been a greater willingness among married men to undergo vasectomies and for women to undergo tubal ligations, allowing better child planning for young families. The greater availability of abortion clinics has also allowed pregnant women a socially acceptable means of not giving birth to unwanted babies.

Looking forward, the United Nations, CIA and World Bank all forecast TFRs for more than 190 countries. All three are suggesting that the TFR for the U.S. will rise above 2.0 in 2012, though still below the self-sustaining level of 2.1.

Other than the absolute decline in birthrates (which a more robust economic recovery might reverse,) and the fact that unwed mothers continue to give birth at alarming rates, it is hard not to react positively to the PEW report. Birthrates among the immigrant poor are declining, as are birthrates among teenagers across all racial lines. Not unlike pre-industrial England, it is the educated and wealthier that are having more children. No one can predict how long the trend might last, and no one can forecast the consequences, but I find it hard not to be encouraged.

There was a theory advanced, which I don’t accept and that has largely been discredited, that one reason the Industrial Revolution began in England was due to the fact that wealthier (and presumably better educated) families had more surviving children than the poor. The facts, which seem empirically logical, were confirmed in a recent study conducted by Gregory Clark of the University of California at Davis and Neil Cummings of City University New York. The report is titled “Beckerian Family and the English Demographic Revolution of 1800.” They found that, between 1250 and 1800, the rich produced more surviving children than the poor. Between 1800 and 1875, they could find no association between wealth and fertility, but that after 1875 wealth became negatively associated with fertility.

The findings are not surprising in that, in pre-industrialized England, the wealthy were able to provide better food and keep their homes warmer in winter and cleaner all the time. The Industrial Revolution did begin in England and did ultimately bring better conditions for the poor. By the end of the 19th Century, infant deaths and child-birthing deaths had begun to decline, while artificial means of birth control were essentially non-existent. The consequence was an explosion in births among the poor. It seems safe to assume that the major cause for the recent secular decline in births, among teenagers and the poor, is a consequence of education and the easy and inexpensive availability of birth control devices. The economy has added a cyclical element to the mix, but that is likely to reverse as conditions improve.

It remains to be seen if the gradual decline in TFRs point to a permanent population decline in the U.S. I suspect the answer is no. However, in much of the developed world, the numbers would seem irreversible. Mainland China’s TFR is 1.55. In Europe, Spain, Switzerland, Germany, Austria, Italy, Hungary, Greece, Slovakia, the Czech Republic, and Lithuania all have TFR’s below 1.5. Japan’s is 1.39 and South Korea’s is 1.23. These countries will have tough economic times ahead unless they can reverse these population trends. France is an example, though, of a country that has reversed course; however, it has been Muslim immigrants that have been driving their increase in births, a condition which portends a different problem.

Nevertheless, in the U.S., it is hard not to be encouraged by the fact that babies are increasingly arriving because they are wanted, not as a consequence of a mistake.

 


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