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.
Three, why paid family leave might save the economy.
Children require a lot of time and money — and not surprisingly, workers who do not 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, said fertility rates rose in Scandinavian nations after better workplace policies such as paid maternity leave and flexible work timings were introduced.
The US should have paid family leave, Chavkin said, if it is 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 said.
Four, blame Netflix.
Easy access to all five seasons of Breaking Bad might be one reason why a country’s birth rate falls, if several studies are to be believed. Stanford academic Martin Lewis wrote about the research of Robert Jensen and Emily Oster’s studies of India to explain declining birth rates.
Jensen and Oster’s study said 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.
Five, immigrants are not 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 last year, according to the National Center for Health Statistics data brief, indicating that immigrant birth rates are also falling.
You might 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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