As a Baby Boomer, I was born during a time when people were concerned about the population growing too quickly. However, now the opposite is true. Birth rates have declined globally, and we are facing the possibility of a shrinking population. More than two-thirds of the world’s population lives in countries with birth rates below replacement, including India, China, the U.S., Brazil, and all of Europe. While the United Nations predicts that the global population will peak near the end of the century, many demographers expect it to happen much sooner, possibly by 2050.
Those who view the declining population as a positive development tend to overlook the difficulties it will create. For example, the federal government continues to spend more than it taxes, causing its debt to spiral upward. A low birth rate means more retirees and fewer workers to support them, resulting in more people entitled to Social Security and Medicare but fewer taxpayers. This situation worsens the debt. Even if we were to rein in the debt, a shrinking and aging population means more non-working people wanting to buy things with their savings, but fewer people to produce them, leading to rampant inflation. As Stanford economist Charles Jones puts it, declining population has profound implications: “Rather than continued exponential growth, living standards stagnate.” He’s not alone. In a recent survey, 58 percent of economists agreed that the economic benefits of an expanding world population outweigh the economic costs.
So, what can we do about this problem? Why aren’t people in their 20s and 30s having more children? Surveys suggest that a wide range of factors are at play, some economic, and others cultural. On the economic side, young adults worry about the costs of raising children, problems paying off current student loans, and the high price of a home. On the cultural side, they explain that having children just isn’t a priority.
While a common response is to subsidize raising children, experience around the world with such pro-natal policies demonstrates that they are very expensive. A pro-natalist policy could cost $200,000 or more per additional baby born, which is prohibitively costly. Perhaps such policies are warranted, but let’s consider ideas that can boost fertility without coercing taxpayers into footing the bill.
In an underappreciated paper, economist Steve Levitt showed that child safety seats are no better than seat belts at reducing fatalities among children ages two to six. Yet many states require these seats, significantly raising the costs of having a third child. A study by Jordan Nickerson and David Solomon concludes that these laws have led to a permanent reduction of about 8,000 births each year. Removing these laws would be pro-natal.
A much larger boost to fertility could come from reducing the price of the kind of homes that young parents like to buy. Unfortunately, many localities have zoning laws that make building affordable housing difficult. Relaxing these restrictions could be pro-natal.
Many young adults don’t want to start families because of student debt. Accordingly, we should think of ways to make college more affordable, such as shifting funding at middle-tier colleges from research toward teaching. We could also mainstream the idea of having students graduate in three years, which would cut their debt and give them an extra year to achieve career goals before starting a family.
Pro-natal actions needn’t be restricted to the government. Potential grandparents can get involved by saving half the money they would have spent on a posh wedding for a future grandchild.
Sadly, the share of American adults who say that having children is very important to them has plummeted to 30 percent. What would happen if society stopped thinking of new children as a burden? What would happen if you simply thanked a friend, a co-worker, or even a complete stranger for bringing a new child into the world? You should because we need children as much as they need us, and not only for economic reasons.
