America's Declining Birthrate Could Be Good For The Economy

declining birth rateIn another sign of the recession's deep impact, the federal government released a report last week showing that the national birth rate declined for the third year in a row.

More than 100,000 fewer babies took their first breath in 2010 than the year before. The fertility rate -- the number of children a woman is expected to have in her life given the current rate -- is now 1.9. That's under the 2.1 rate demographers say is necessary for a generation to replace itself.

A fertility rate below replacement level is usually bad news for a country's economy. The social cost of retirees risks overwhelming a dwindling workforce, unless offset by a large enough flood of fresh-faced immigrants. This year, the first wave of baby boomers (those born between 1946 and 1964) hit retirement age, and are leaving the workforce at a rate of 10,000 a day, according to the Pew Research Center.

Fewer Babies Could Be An Economic Boost

But the decline in the U.S. birthrate could actually be great news for the economy.

The women who are not having children this year will probably have them a few years from now. "It's important not to think of these as births that have been foregone, but as births that have been postponed," says Brady E. Hamilton, a statistician for the National Center for Health Statistics and co-author of the report.

The birthrate drop between 2009 and 2010 shrinks steadily by age group, almost like a geometric pattern: 10- to 14-year-olds, 20 percent drop; 15- to 17-year-olds, 12 percent; 18- and 19-year-olds, 9 percent; 20- to 24-year-olds, 6 percent; 25- to 29-year-olds: 3 percent; 30- to 34-year-olds, 1 percent.

"If you're 22 and want to have two kids, you have plenty of time to still have those kids," says Sheela Kennedy, a research associate at the Minnesota Population Center at the University of Minnesota.

"They're just holding out until the economy gets better," notes Gretchen Livingston, a senior researcher at the Pew Hispanic Center. "But women 39 and over, you don't see that decline, because they don't have the option of postponing."

Women in their early 40s in fact gave birth to more children in 2010 than the year before. But the teen birthrate is now the lowest since record-keeping began in the 1940s.

The younger the person, the less economically prepared they are on average to start a family, and this has never been more true than now. Twenty-four percent of older teens and 14 percent of early 20-somethings are unemployed. Over half of 18- to 24-year-olds live with their parents.

Ten years ago, two economists controversially concluded that the falling U.S. crime rates in the 1990s were largely the consequence of the legalization of abortion in 1973. Those unwanted children, who were statistically more likely to commit crimes, didn't exist to come-of-age.

The high rate of unemployment today, in a similarly counterintuitive twist of logic, could have a positive effect on the U.S. economy. Teen mothers are less likely to graduate high school than women who have children at an older age, and are more likely to end up in a low-wage job, no job at all, or in prison. This is also true for their children.

If all the teen mothers in 2008 had given birth at the age of 20 or 21 instead, U.S. taxpayers would have saved $10.9 billion, according to an analysis by The National Campaign to Prevent Teen and Unplanned Pregnancy. This is primarily because teenage pregnancies cost the public more for health care, foster care and incarceration, as well as lost tax revenue. One quarter of teen mothers go on welfare within three years of their child's birth, according to a 2006 study by the U.S. Department of Health and Human Services.

Does Age Really Matter?

It's a matter of dispute, however, whether the social costs of teenage pregnancy are the consequence of the age that women give birth, or various other factors that made those teenage pregnancies more likely in the first place.

"Is it the fact that teenage moms are having children early, or is it just that they're poor so they're not going to have good jobs anyway?" asks Kennedy. "It's not clear which is which."

It's also unclear whether the drop in the teenage birthrate is a rational response to economics at all. Eight in 10 teens report that their pregnancy is unplanned, according to a study by The National Campaign to Prevent Teen and Unplanned Pregnancy. If only 20 percent of teens decide to get pregnant, it's unlikely that the dramatic drop in the teen birthrate is entirely a reaction to material circumstances.

But "unwanted pregnancy" isn't such a clear-cut term. "They may think 'getting pregnant isn't my first choice, but it isn't so bad,' " explains Sarah Hayford, an assistant professor at the School of Social and Family Dynamics at Arizona State University. "And depending on how bad they think it would be, they'll use protection."

The current economic situation has made the costs of pregnancy a lot more dire for many teens. So more may be taking precautions, like using contraceptives, or avoiding sex altogether.

The Bad Economy A Turn-Off For Teens

"You can imagine that there are fewer kids getting involved in relationships," says Kennedy. "There's no money to do anything, everyone's depressed, and they're living at home."

There is no national data on teenage sexual activity after 2009. But the percentage of high schoolers who had never had sex increased between 2007 and 2009: 52.2 to 54 percent, according to the biennial Youth Risk Behavior Survey, conducted by the Centers for Disease Control and Prevention. The data for 2011 will be published next June.

Teen sexual activity and teen birthrates haven't just declined in the last few years. The sexual activity of high schoolers and the teen birthrate have been steadily dropping since the early 1990s. The teen birthrate fell a total of 34 percent between 1991 and 2005, before an uptick in births in 2006 and 2007.

No one is entirely sure why the teen birthrate is dropping. "Everyone's kind of mystified," says Hayford. "The larger trend is towards everything being at later ages. The decline in teen pregnancy is part of that shift."

The dramatic drop in teen births over the last few years is a continuation of a longterm trend, but "exacerbated or sped-up by the current economic conditions," adds Hayford.

An Adorable Stimulus Package

In the short term, this could slow our economy's recovery. Babies are expensive. There's a new mouth to feed. A new body to clothe. Childcare, vaccinations, diapers. Delaying childbirth may be a smart financial decision on the individual level, but it withholds a significant chunk of change from the economy at large.

As The New York Times reported this week, 350,000 fewer households were created last year than in 2007, because of all the young people biding their time in their childhood bedrooms. Creating a new household involves spending some money -- and the expense increases exponentially. Every new household that isn't created deprives the economy of an estimated $145,000.

By not having a child because of financial insecurity, potential parents are denying the economy a very dynamic and adorable stimulus package.

But in the long-term, the economic conditions that are discouraging young motherhood may end up improving the economic conditions of those women down the line, as well as saving the public money as a whole. With fewer teen mothers today, there may be fewer Americans 16 years from now joining the droves of the jobless.

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Gaw Ernesto

Less responsibility, more happy life for the people of America. As a whole it will be good for that country.

November 22 2011 at 10:54 PM Report abuse rate up rate down Reply

Less neglected & abused children maybe?

November 22 2011 at 5:53 AM Report abuse rate up rate down Reply

My company changed its healthcare insurance so having children is a much more costly item on the budget. If the government wants to tax health care programs as proposed, the only people that will be having excess children are minors and the poor who don't have the wherewithal.

November 22 2011 at 5:52 AM Report abuse rate up rate down Reply

Our birth rate won't be declining for long as long as illegals cross the border and spew out anchor kids like watermelon seeds. We need to put a stop to this idiotic birthright citizenship NOW.

November 22 2011 at 2:02 AM Report abuse +3 rate up rate down Reply

who wants to have a kid in the f897ed up world, we have no morals or patriotism we have companies and polticians selling out AMerica -both parties and AMerica thinks there is actual parties there is only one party and agenda and that is the NWO agenda, our news media is bunch 56 sellling AMerica truck loads of bs. This why your seeing the new police state.

November 22 2011 at 2:00 AM Report abuse -1 rate up rate down Reply

There are limited resources on this planet and it amazes me that so few people are worried about it. The "economy" is fueled by people needing or wanting things. More people needing and wanting makes for more money flowing into the providers or manufacturers. Right?

Up to a point. Then when we've run out of land, when we cannot grow enough crops or drill for enough oil, then prices rise, The poor stop buying and the middle class slows down their buying habits. And the decline sets in. I'm a jewelry designer .... my product is not a neccesity, therefore, I will be among the first businesses to fail. We need food and shelter, so those providers will be the most durable in this shrinking world of consumption.

The problems is two fold. Too many people chasing too few resources. And an artificial system which encourages consumption of unnecessary products with a whole infrastructure of "busy-work" paper pushing jobs to sustain the companies providing those products. And a top heavy government to promulgate more laws and restrictions and of course to provide more "busy-work". An economy based on unnecessary consumption of luxuries combined with rapidly shrinking basic resources is bound to crumble.

We need to re-balance. Less population increase combined with less wasteful consumption. This is of course a dirty word ..."Downsize".

But what is the alternative? The planet will only sustain so much rampant population growth before starvation, war and disease appear to balance the system.

November 22 2011 at 12:58 AM Report abuse +3 rate up rate down Reply

When the economy recovers (IF it does), the birth rate will rise, too. However, be concerned about the percentage of single/unwed and teen mothers.

November 22 2011 at 12:01 AM Report abuse +4 rate up rate down Reply

come to the philipines, they have babies so many they cant take care of them, 4 ,5 or 8 babies to famiiy. just send them to the us,

November 21 2011 at 11:42 PM Report abuse -1 rate up rate down Reply

>>> There is another view of the outcome resulting from these birth rate trends that emerges from the answers to several questions as follows. --- What are the birth rates for the non-hispanic white population and for the hispanic/ latino population respectively? From the data presented, it would be about 1.7 for the non-hispanic white population. From past census data, it would be about 2.8 for the hispanic/ latino population. What is the nominal duration of one generation in the non-hispanic white population and the hispanic/latino population respectively? The duration of a generation has been increasing in the non-hispanic white population and is currently about 28 years ( or soon will be). The duration of a generation in the hispanic/latino population is about 21 years. Given these birth rates and generation durations, the non-hispanic white population will be reduced to about 50% of its present number in three generations which would be about 84 years; and the hispanic population will increase by about 310% in four generations which also would be about 84 years. This means that the non-hispanic white population, about 200 million currently, will decrease to about 100 million; and the hispanic/latino population, about 50 million currently (not including illegals), will increase to over 150 million about the year 2095 assuming that there is no future immigration, legal or otherwise, of hispanic/ latino people. However, in actuality, present and future illegal immigration will accelerate this outcome greatly. The current trends in birth rate and generation duration for non-hispanic whites is unadaptive and will result in significant negative impact on the lives of those in this population group in the future. <<<

November 21 2011 at 10:59 PM Report abuse +1 rate up rate down Reply

And yes, there have been panicked people desperate to have kids before their paranoia catches up with them and they closely avoid the inpatient nuthouse hospitalization. The world already has tens of millions of kids that are basically unwanted. The parents may have a scheme, that the government takes care of their children, until they decide to swoop back in when the kid is sixteen or eighteen, or twenty six and can add to their TREASURE ON EARTH, BECAUSE THE KID WAS A HUMAN TRINKET TO BEGIN WITH, basically, kinda sorta, with eighteen trillion tons of hot air on talk TV. Antisocial parenting is also not really going to be that helpful to the future. If you don't want your kid now, you can't have them later either. I AM NOT TOO SORRY FOR THOSE KINDS OF LOW LIFES.

November 21 2011 at 10:02 PM Report abuse +3 rate up rate down Reply

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