Tue, Dec 16, 2014 - Page 9 News List

Trying to pinpoint the cause of the US’ declining birthrate

With fewer babies being born future economic growth is threatened, but economists can only guess at the reason

By Siri Srinivas  /  The Guardian

Illustration: Yusha

Americans are not making enough babies, and economists have no idea why.

The US National Center for Health Statistics just released its latest data brief summarizing the bleak news.

There were only 3.9 million births in the US last year, according to the report, down about 1 percent from 2012. The general fertility rate also declined 1 percent last year to another record low: 62.5 per 1,000 women aged 15-to-44.

The truth is, birth numbers have been in decline for six straight years, dropping 9 percent from a 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 is another reason the US needs more babies: to balance out the aging population. As a cautionary tale, look at Japan. This year, more adult diapers were sold in Japan than baby diapers. Japan’s median age is 45 years old, indicating an aging 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 do not work as well. Quantitative easing, which lowered interest rates to zero in the UK, affect an aging population less because older people do not depend on debt.

So the dropping fertility rate is bad. What should be done to get it to increase? Economists, as you might expect, are at a loss for explanations, much less solutions. Here are some of the theories.

One, 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 percent rise in home prices led to a 1 percent decline in child birth rates amongst 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 nexy year. That does not bode well for babymaking.

Two, MTV helped bring down the teen birth rate.

According to US National Center for Health Statistics data, teenagers giving birth dipped to an all-time low last year, dropping 10 percent to 26.5 per 1000, bringing down the overall rate. 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 observed that it might have caused a 5.7 percent drop in babies born to teen mothers. Tweets on birth control increased by 23 percent 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 is no way to know.

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