Trends in Fertility in the US

In module 9, we will study financial imbalances and aging as sources of risk for the world economy. The problem of aging populations is primarily an issue in rich industrial democracies, though it also affects China, due to reasons specific to that country's past policies (the one-child policy). This has caused policymakers to start thinking about ways to encourage families to have more children. France, for instance, has had a long-running policy of providing financial allocations to families with kids. The grants increase with the number of children that a family supports. France does have a birth rate that is higher than some other European countries like Italy or Spain, though the jury is still out as to whether the allocation system plays a major role in these differences. Personally, I think social norms are much more important than financial incentives. Nonetheless, the debate now rages in the US, and it seems like a bipartisan consensus is forming over the issue of child tax credits. This WSJ article has further details.

Comments

[Kunal Dagli]

Although it hasn't been passed so far, the Indian state of Uttar Pradesh is exploring a two-child policy which, based on this Vice article (https://bit.ly/3eyqHZI), sounds similar to the policy China had adopted in the past.

[Dylan Dorenfeld]

Kunal, that is a very interesting article you posted that presents a very different problem than we are facing here in the US.

In reference to the original post, I'm really curious to see what happens in the US with the introduction of such incentives. I see many young adults delaying or forgoing parenthood for reasons beyond financial limitations, such as the desire to travel or pursue their careers. I think these incentives could indirectly help with fertility rates, as perhaps young adults would realize they could do "both" (i.e., be a parent and pursue their career with extra funds for child care), but I think it is hard to know if these incentives would really solve the bigger problem we are facing. I agree with you, Professor, that social norms probably play a heavier role in these decisions.

[Molly Arenson]

Despite an aging population and declining birth rates, our population is still growing and is expected to reach about 10 Billion people by 2050. The US Census predicts that largest share of the US population from now through 2060 will be ages 18-64 (https://www.prb.org/resources/u-s-population-is-growing-older/). With that being said, I don't fully understand the worry around declining birth rates and the rush to incentivize people to have more kids. I think the US and countries worldwide should be more concerned with having enough resources to support such a large population.

[Kevin Cohen]

In response to your comment, Molly, while I agree that the scarcity of resources is an existential threat to our world, declining birth rates in wealthier nations such as the U.S. may have several impacts including on 1) short-term inequality due to widening demographic differences (see https://www.economist.com/finance-and-economics/2012/08/11/baby-monitor) and 2) GDP. Both threaten the existing power structures of our world. However, a simple solution is for wealthier nations to support higher rates of immigration to sustain themselves, although that brings significant political challenges, as we learned in earlier modules.