Birth rate poses looming economic cloud

10/5/13. Birth rate poses looming economic cloud. Leslie Fain,

“China’s got a shortage of workers, impacting its economy, because of the nation’s years-long limit of one child per family and Russia’s Vladimir Putin fears his nation may lose influence and power as a result of the declining population.

Now the forecast is out that the U.S. economy could come under stress in the future – because of a lack of babies. 

Jonathan V. Last, author of “What to Expect When No One’s Expecting: America’s Coming Demographic Disaster,” believes the U.S. is in for a rocky ride in the next few years – demographically.

“We’ve seen a decline in fertility going back to the foundation of this country,” said Last. “The only interruption we had was the Baby Boom.

“This uninterrupted fertility decline has stabilized in recent years, but only because we had a massive influx of Mexican immigrants propping us up. We look much like Eastern Europe without them,” said Last.

He lays out the case that fewer people are choosing to have children, and that means Social Security and Medicare will become less stable as more and more people draw benefits and fewer are paying in.

Mark Regnerus, who is associate professor of sociology at the University of Texas at Austin and is also a faculty research associate of the university’s Population Research Center, said that whether the U.S. could experience a birth dearth depends on what birth rate you define as a “dearth.”

Fertility is lower among non-Latino American women, said Regnerus.

“The ‘fertility trap’ experienced in some European and Asian countries does not seem forecast for the U.S. for the foreseeable future,” he said.

But he said part of the reason is that there seems to be a more latent pro-child orientation in the U.S. than appears in some European countries. Like Last, though, Regnerus said that American fertility is propped up, in part, by the immigration of Latinos.

The nation cannot count on immigrants to support population levels, though, according to Last, because the new generations tend to assimilate, become more like their hosts, and their fertility rates drop.

Last said one only needs to look at Central and South America to see the massive fertility declines.

“When fertility declines, then they stop sending out immigrants,” said Last.

Right now, Mexico is just at or just below replacement rates.

“It is entirely possible they may have a lower fertility rate than us in several years,” he said.

It is important to note that no one can predict future population or fertility rates, said Last, but if current rates continue, the U.S. will experience a birth dearth that will affect the economy and culture adversely.

The Baby Boom in the middle of the 20th century is just one of those times in history demographers would have had a hard time predicting, according to Last.

“If in 1944, I told you the fertility rate would double over the next couple of decades, people would have said [I] was crazy.”

What will the U.S. look like if the birth dearth Last predicts comes to pass? A lot like Florida, or perhaps Japan.

According to Last, contraction in population is not the problem, as much as the ratio between young and old populations.

“You look at the age structure of Florida – it’s top-heavy – lots of old people. That creates a lot of problems when you have a major entitlement state like we do.

“Japan is 30 years ahead of us,” said Last. “They sell more adult diapers there than baby diapers.”

It is hard to have a thriving economy when people opt out of having children, said Last. Consumption and innovation dry up when people have fewer children, and the population begins graying.

“The future is banking on there being people to populate it,” said Regnerus. “Young-to-middle-age adults are economic drivers, creators, and frankly they pay the bill for the promises we’ve made to our senior citizens and the poorest among us. The more we promise, and the longer we live, the larger labor force we need, or else the higher taxes need to be raised.”

Birth rates also aren’t easily changed.

“It’s difficult to ‘stimulate’ fertility amply via public policy,” said Regnerus. “I don’t know that there is much that can be done. Other countries have attempted various policies, including tax breaks and payments to new parents, but the results have not been profound. ‘Do no harm’ would be a good policy. I don’t see the logic in offering state-funded contraception, for example.”

Why is there a decline?

“There are some things that are universal, like the fact that mortality rates have fallen,” said Last. “You no longer have to have 10 children to ensure five of them will survive.”

In addition, the cost of college having risen 1,000 percent over the years has had a big impact, according to Last. When young couples face huge college debt, many opt to delay childbearing. When those same couples are financially able to have children, they may decide to have fewer because they know they cannot afford to send them all to college.

Finally, Last said that birth control, abortion and divorce have all contributed to Americans deciding to have fewer or no children.”

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