Americans are not making enough babies, and economists have no idea why.
The National Center for Health Statistics just released its latest data brief summarising the bleak news.
There were only 3.9m births in the US in 2013, according to the report, down about 1% from 2012. The general fertility rate also declined 1% in 2013 to another record low: 62.5 per 1,000 women aged 15–44.
The truth is, birth numbers have been in decline for six straight years, dropping 9% from its peak in 2007, according to the report.
If a slow economy is bad news for the birth rate, it also works the other way: declining fertility and birth rates are bad for the economy. Shrinking labor forces, weaker social security, and other consequences soon follow.
Baby diapers are an important economic indicator
There’s another reason we need more babies: to balance out the aging population.
As a good cautionary tale, look at Japan: in 2014, more adult diapers were sold in Japan than baby diapers.
Japan’s median age is 45, indicating an ageing population. Perhaps not coincidentally, the country has also unexpectedly slipped back into recession.
Last year, IMF economist Patrick Imam published a working paper studying age and economies. According to Imam, young people are more dependent on credit, take out loans, and are active consumers while older people have less debt, and rely on savings, and bonds instead of the stock market.
In an older population, then, bailouts of the financial system don’t work as well. Quantitative easing, which lowered interest rates to zero here, affect an ageing population less because older people don’t depend on debt.
So the dropping fertility rate is bad. How do we get it to increase? Economists are (as you might expect) at a loss for explanations, much less solutions. Here are some of the theories.
1. Freddie and Fannie killed the storks
Remember 2007? Houses were cheap, unemployment numbers were low and the fertility rate was at its highest. When the music stopped, so did the optimism – and the babies.
A 2011 study conducted by economists Melissa Kearney and Lisa Dettling, showed that every 10% rise in home prices led to a 1% decline in child birth rates among non-homeowners in metropolitan areas between 1990 and 2006.
Fannie Mae’s November Housing Survey reflected Americans continued disdain for the housing market and projects a slow recovery in 2015. That doesn’t bode well for babymaking.
2. How MTV helped bring down the teen birth rate
According to the NCHS data, teenagers giving birth dipped to an all time low in 2013, dropping 10% to 26.5 per 1,000, bringing down the overall rate. Melissa Kearney and Phillip Levine’s research titled “The Impact of MTV’s 16 and Pregnant on Teen Childbearing” evoked controversy earlier this year for suggesting that reality TV shows about teen mothers contributed to a decline in teenagers giving birth.
The economists studied social media activity and research patterns on the internet after the show’s airing, and observe that it may have caused a 5.7% drop in babies born to teen mothers. Tweets on birth control increased by 23% on the day after each new episode of 16 and Pregnant, according to the paper’s authors. Is that enough to affect the national birthrate? There’s no way to know.
3. Why paid family leave may save the economy
Children require a lot of time and money and, not surprisingly, workers who don’t have either tend to forego having children.
Wendy Chavkin, a professor of population and family health at Columbia University’s Mailman School of Public Health, says fertility rates rose in Scandinavian nations after better workplace policies such as paid maternity leave and flexible work timings.
We should have paid family leave in the US, says Chavkin, if we are to fix the declining fertility rate over the long term. Unpaid leave is not very useful, she says, especially in harder economic climates.
“The US is not interested in this sort of supportive social welfare policies that have tended to typify Europe,” she says.
4. Blame Netflix?
Easy access to all seven seasons of Breaking Bad may be one reason why a country’s birth rate falls, if several studies are to be believed. Stanford academic Martin Lewis writes about the research of Robert Jensen and Emily Oster’s studies of India to explain declining birth rates.
Jensen and Oster’s study noted that in India, while female literacy co-related highly to lower fertility, it was not the only factor. The introduction of cable television trumped rates of urbanization, even general economic and social development in its alignment with fertility rates in Indian states.
Lewis also quotes the work of Eliana La Ferrara, Alberto Chong, and Suzanne Duryea on the relationship between telenovelas or soap operas in Brazil and fertility. “We find that women living in areas covered by the Globo signal have significantly lower fertility.” The researchers say that telenovelas represent smaller families, in turn promoting the same to its viewers.
The effect of television on fertility is a popular area of study in demographics studies, often focused on developing economies.
5. The Immigrants aren’t helping
Immigrants – who have more children than the general US population – are having fewer children.
The general fertility rate has declined for all race and origin groups from 2007 to 2013, according to the NCHS data brief, indicating that immigrant birth rates are also falling.
You may have heard that immigrants are not feeling welcome in the US lately. And if US policies discourage immigrants from having children, then a lower birthrate is to be expected. “Generally most people want to have children,” Chavkin said.
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