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Behind the falling US birthrate: too much student debt to afford kids?

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In some respects, the birthrate drop simply follows the century-long demographic glide path to smaller families, measured by fewer children per woman. Many nations in Western Europe, from Spain to Italy to Germany, are further along it, hitting a negative total fertility rate. America might have already hit that point, too, if not for higher immigration and the tendency of immigrant women to have more children than native-born women.

But the economic implications of a shrinking population are worrisome to many economists and political leaders. When the national fertility rate falls below the population replacement rate of 2.1 babies per woman – as it has in developed countries including Japan (1.4), Singapore (0.8), Norway (1.7), and Britain (1.9) – long-term plans for productivity and the social safety net become inviable.

For instance, America's Social Security program depends on having enough younger people in the workforce to cover benefits for retirees; a shortage of working-age people makes the program unsustainable at existing tax rates. Concern about low birthrates has led some nations to give their citizens financial incentives to have more children. Singapore, for one, now has a "Parenthood Package" that includes paternity leave, subsidies for fertility treatments, and special savings accounts for each child.

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