What does the declining U.S. fertility rate say about housing sales, Social Security and college?

Illustration by Zoë Petersen

Policies could make having babies more affordable, stave off economic stagnation, social challenges. Or, do the opposite.

American women are having far fewer babies than a couple of generations ago as lifetime birthrates trend down for reasons as diverse as dramatically fewer teens giving birth and women waiting longer to become mothers.

Even states like Utah, with larger-than-average families, are below the “replacement” rate of 2.1 babies per woman of childbearing age that would keep the population count stable without relying on immigration.

What’s tricky is figuring out what fewer births might mean to different generations. Experts speculate ramifications exist for schools, for the economy, for building personal wealth and even for personal relationships, with different effects for the young, middle-aged or old.

Ramifications range from individuals not being able to have the number of babies that they want to people being lonelier and perhaps poorer in old age, said Lyman Stone, a demographer and scholar with both Washington, D.C.-based American Enterprises Institute and the Institute for Family Studies in Charlottesville, Virginia.

Without a younger generation of workers replacing older people exiting the workplace, cities, states and countries might grapple with economic stagnation and great inequality because of declining fertility, he added.

An effective response, experts agree, would be policies that give young couples the resources so they feel they can afford to have children.

“Really, it comes down to support for young families and restructuring the institutions of work and home life in a way that younger people will feel economically secure in having more kids,” said Pam S. Perlich, director of demographic research for the Kem C. Gardner Policy Institute at the University of Utah.

Jeffrey D. Allred, Deseret News

Newborn identical twins Matthew Criddle, front, and James Criddle, back, rest at the Davis Hospital and Medical Center in Layton on Sunday, Jan. 1, 2017. James was born at 11:59 p.m. Saturday, and Matthew was born at 12:01 a.m. Sunday, making him the first baby born in the new year in Utah.

Fertility’s ripple effects

Perlich said while dipping fertility is a long-term trend, “in recent years, it’s really accelerated beyond anything that we had imagined.”

If they give birth at existing rates, American women are predicted to average 1.78 children over the course of their childbearing years, generally 15 to 44. The decline is incremental but the end result is roughly half the fertility rate of women in the 1950s: 3.58, according to Centers for Disease Control and Prevention data.

Many social policies today were rooted in the growing-family era in the ’50s and ’60s, including Social Security, a program to help older adults financially when they retire. That era’s robust family growth also contributed to economic growth, entrepreneurship, bustling schools and universities and even the ability of today’s older adults to buy houses and accumulate wealth they could pass to their children.

Shrinking generations have some experts worried that means shrinking lifestyles, too.

America might become an inverted pyramid, where old people outnumber working-age people, who outnumber children. That would pressure that smaller base of adults expected to work and create new businesses and pay taxes and spend — activities that keep a society from stagnating. Plus, they’d be juggling to meet the needs of their elders and children, too. It’s already happening dramatically in countries like Japan, which has the highest proportion of people over 65 anywhere.

“There’s really some very extreme implications there that we have not experienced,” said Perlich. “A healthy society would be one where people who wanted to have kids could and they would feel confident about their ability to support those kids — and have social and economic infrastructure supports in general.”

The pandemic’s likely to affect birth rates, too, including with higher childbirth complications and mortality, according to projections in the American Journal of Obstetrics and Gynecology. And Reuters reported scientists fear COVID-19 could reduce male fertility worldwide.

Even potholes are connected to fertility. And experts say if you want to know the link between corporate prosperity and fertility, consider the struggles of some formerly prosperous diaper makers and toy retailers.

The ripples are both complicated and far-reaching. Stone and Perlich agree a decent quality of family life is now a big-ticket item. Components include affordable and available housing, child care for those who need or want it, education options to increase employability and transportation options to get where families need to go. Costs in many communities are rising faster than wages. Even with two working parents, many families need an extra job.

Fewer births could be felt by rich and poor alike. The stock market depends on more people who can buy the products or services that give a company value, Stone said. Many Americans’ “wealth” is in the house they own, but won’t exist outside of paper unless others can afford to buy when someone wants to cash out.

Turning it around?

Policy that helps families feel confident they can afford children could change the trajectory, Perlich said. If grandma’s not around and young families don’t have some supports, their options are limited by time and resources.

Policies like paid leave, no retribution from the boss if one needs time to care for infants, flexible schedules and affordable, quality child care “could directly impact a decision” on whether to start or expand a family, she said.

Immigration policy can backfill when births drop, Stone said. But as more countries prosper, fewer people leave home, so immigration has its limits. And history has shown that a large immigrant influx “tends to yield a negative backlash,” he added.

Children tend to do best when their parents are together in a stable, committed relationship. Studies suggest that’s most likely to happen in marriage. So tax code and safety net policies that penalize marriage make it harder for working-class Americans to have kids, Stone said. “If you marry, you often lose benefits or pay more. That’s a problem.”

Policies could also alleviate some of the major costs that families have, including child care, education, housing and health care, said Stone.

He believes tax reform should include altering property taxes that allow older people to stay in the homes they bought when they were younger without paying tax based on the property’s real value. If they had to pay tax on the real property value, a lot of them would sell their homes “for a huge mark-up” and move with the windfall to be closer to their kids, he said. Everyone would be happier. Where property values have risen a lot, he noted, kids can’t afford to live near parents and many young people can hardly afford housing that lets them expand their families if they want to.

Stone doesn’t like the idea of creating programs that only benefit one set of family choices. Paying for child care only benefits those who need or want to avail themselves of child care. Making college affordable doesn’t help those who choose a different path, he said.

“You can’t really give benefits for a specific education or child care model. It’s better to handle that through cash transfers, like a child allowance,” said Stone, who believes hat would help families make choices that work with their values and situations.

He’s worried about what happens if ramifications of a declining birth rate aren’t addressed. It’s not farfetched to think the time will come when too-few working-age taxpayers can’t support programs like Social Security without a hefty hike in their contributions or older adults losing a big chunk of the benefit, Stone warned. Since older Americans are a huge voting bloc, he figures the money will be found elsewhere, possibly cut from programs that would be hard to lose.

Perlich thinks it’s time to really consider the areas where families need help and then provide some support. “If we think about what are the supports for transportation, for access to health care, for access to upward mobility and economic opportunity, for access to affordable housing. If we put that at the center of our policy priorities, we come up with a completely different set of policies than if we prioritize tax revenues or production or profits,” said Perlich. “There’s a way to reorient and restructure our institutions so that we can make it work.”

While policy’s a big factor, Stone said, it is not the only factor determining whether people have children. “Culture is very important. It’s about values toward family and children.”

Perlich agrees. And both see a role for family members and those who are doing well to help fill some gaps. Everyone has a stake in the economic success and health of younger folks so they can have the families they want, the two separately told the Deseret News.

Maybe the adage was incomplete. What if it also takes a child to raise a village?

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