America’s- and the World’s- Baby Bust

In Economy, Immigration on February 3, 2013 at 1:22 am

Jonathan V. Last’s article “America’s Baby Bust” [1] is thought-provoking and echoes points I’ve made myself.  Specifically, the US birthrate has recently dipped below replacement and it already far below replacement in Japan and many European nations.  A surprising number of developing nations, e.g. Mexico, are below replacement rate as well. 

Mexico is a dramatic example, with female lifetime fertility dropping from about 7 in 1970 [1] to 2 today.  One implication is we should expect less immigration from Mexico in the future because there will be less need for the safety valve of El Norte.

The economic implications will be severe.  Think how much of the US economy is geared to market growth.  In sixty years or so, Europe, China and Japan will be shrinking at a fast rate.  The US may be, as well.  Construction will still occur, but for replacement rather than new growth.  Companies will have to take market share from each other or develop wholly new products to grow their revenues.

There will be significant social impacts.  Social Security programs will be challenged worldwide as a shrinking pool of workers is pressed to pay for large cohorts of retirees.  Schools and colleges will need to be closed.  In some places, roads and highways may be abandoned.  Even today, in the growing USA, there are areas that shrunk in population in the 2000’s (e.g. Chicago and Detroit) though they were offset by growth in places like Dallas and Atlanta.  Imagine how severe local depopulation will be if the overall US population is shrinking.  Since many municipal costs are largely fixed (e.g. maintaining sewer systems), a shrinking taxpayer base will challenge many towns in the future.

Mr. Last points out how this future is all but unavoidable.  Raising children is a cost and a major effort.  Even if government tax breaks for children are increased (which he recommends), people marry later, partly due to the high rates of college and post-graduate education, and have fewer children.  One unexpected consequence of national welfare and social security systems has been fewer children.  Baring major medical advances allowing the safe birth of children into later ages, the preference for fewer children is not easily overcome.  Thus, we will all have to plan for a future where the US, and especially Europe, China and Japan are shrinking.


Pictures from Wikipedia Commons.

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