Demographers have previously thought that low fertility among US women is a result of the 2008 Great Recession and will recover at some point, just as it has following historic recessions. It was thought that many women were simply delaying pregnancy and there would be a cyclical rebound. However, it seems increasingly likely that structural changes may mean that the US fertility rate never recovers.
A recent study undertaken by The Center for Retirement Research at Boston College backs this up. Among its key findings is that, while fertility typically rises in expansions, in the current expansion it has actually declined more than it did during the recession.
The following four structural changes suggest the decline in the birthrate between 2001 and 2016 may be more permanent than previously thought:
- a falling birthrate among Hispanics – this group has historically had a higher birthrate than the general U.S. population and was previously propping it up but is no longer doing so;
- a rising share of women with college degrees – this group tends to have fewer babies;
- increasing numbers of people who do not identify as religious, another group which tends to have fewer babies; and
- a rise in the female-to-male wage ratio, meaning women are more likely to be focusing on career over motherhood and are therefore likely to continue to have fewer babies.
This spells trouble for future retirees. As the reports states,
“The future of the fertility rate is important in that it determines the age structure of the population, the ratio of workers to retirees and, hence, the finances of the Social Security system (which operates largely on a pay-as-you-go basis).
According to the 2018 Social Security Trustees Report, a total fertility rate of 1.8 children per woman instead of 2.0 would increase the program’s 75-year deficit by 0.41% of taxable payrolls or a present value of almost $2 trillion.”
The total fertility rate in 2017 was just 1.76 births per woman, according to the paper. That was a slight increase from 2016 when it stood at just 1.7, the lowest birth rate in American history.
Not only do lower birth rates mean a struggle to pay benefits at existing rates, they also mean that there will be a decline in the number of family members and friends available in the future to freely care for the elderly, likely increasing demand on state care and decreasing quality of life for the dependent elderly.
So what should the US do? Increase immigration or create a culture and develop incentives which mean US women have more babies?