- The US birth rate fell 2% from 2016 to 2017, according to new data from the Centres for Disease Control and Prevention.
- Only women from ages 40-49 are having more kids.
- Economists worry that the dwindling numbers of newborns could have a major effect on the future US labour force.
America may have a baby-making problem.
The US birth rate dropped to an all-time low in 2017, according to preliminary numbers from the Centres for Disease Control and Prevention (CDC).
Women in the US gave birth to around 3,853,472 babies last year – a 2% drop from 2016. At just over 60 births per every 1,000 women (between the ages of 15 and 44), this is the lowest birth rate the country has ever recorded.
The estimated fertility rate in the US is now roughly 1.76, meaning that women will have, on average, less than two kids each. That’s the lowest fertility rate the country has logged since 1978.
A looming demographic time bomb
The birth rate for women between the ages of 30 and 34 had been tilting upward since 2012, but it dropped 2% last year. The birth rate also went down 1% for women between the ages of 35-39 after five years of uptick.
Many experts blame two primary factors for this trend: the 2008 economic recession and the increasingly crippling costs of going to college.
“People are coming out with a lot of debt,” Jennie Brand, a professor of sociology and statistics at UCLA, told The Wall Street Journal.
Economists are sounding the alarm about the effect the falling number of American babies will have on the future labour force. They sometimes refer to this effect as a demographic time bomb. When the economy shrinks, people often opt to have fewer kids. When there are not enough young people growing up, entering the labour force to replace workers, and paying into social security, that can become a big problem. The phenomenon can build over time, leaving old people in need of care without youngsters to help.
Kathy Bostjancic, an economist at consulting firm Oxford Economics, told the Associated Press that falling birth rates have already had a crippling effect on the US economy over the past 10 years because there are fewer Americans working or looking for work. The impact is equivalent to a 0.7% drag on the US’ long-run growth rate, she said.
Other countries, including Japan and Denmark, are experiencing similar demographic time bombs.
The Danes had a fertility rate,around 1.73 last year. The country launched a campaign called “Do it for mum” to encourage Danish couples to have more kids in order to keep the country’s grandmothers happy and its economy humming.
But while having a kid might help the economy grow in the long term, it can hurt an American woman’s chances of getting fair pay. The US Census bureau noted in a working paper last year that women who have kids between the ages of 25 and 35 have a harder time shoring up the gender pay gap than women who make babies before 25 or after 35. Those stats suggest that having a kid mid-career puts women at a greater economic disadvantage.
Interestingly, not all US women are having fewer children. The birth rate among women in the 40-44 age group rose 2% in 2017, and the birth rate for women between 45-49 rose 3%.
In other words, women are having kids older.
This development is nothing new
Since the 1970s, the American birth rate has been consistently below what number-crunchers call “replacement level,” the rate at which new births keep the population steady by matching the number of people who are dying off.
That means that as older generations age out of the workforce, there will be an increasingly skewed ratio of retirees to working Americans.
Of course, making babies isn’t the only way to stimulate the economy. Economists from the University of Pennsylvania’s Wharton School of Business argue that increasing the number of foreign-born workers in the US leads to “higher overall economic productivity” without a negative effect on American workers’ wages. Both undocumented and documented workers are “net positive” contributors to the federal budget, whether they’re low-skilled or high-skilled, according to University of Chicago economists.
Unlike the number of new babies in the US, the share of foreign-born workers is growing. New data released from the Labour Department Thursday showed that the number of foreign-born workers in the US in 2017 rose to 17.1%.
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