The benefits of falling birthrates
NPR reports that birthrates throughout Europe are falling to “dangerously low” levels—as low as 1.2 per woman in Germany. Compare that with 2.1 in the U.S., where population growth has leveled off sharply in the last two decades.
So why is this “dangerous”? Well, that depends on who you ask.
For politicians, declines are bad because they tend to bankrupt pay-as-you-go social insurance schemes like Social Security, since fewer youngsters will be available to pay for retirees in the future. Tax revenues also suffer, since there are fewer warm bodies to tax. Also, some economists argue falling population means falling real GDP, and that means lower living standards.
But what they’re ignoring are the actual causes of falling birthrates—all of which are good things.
The two biggest drivers of lower birthrates are 1) the improved status of women, and 2) rising income and wealth, which has increased the opportunity cost of babies. (see here for a 2000 UN report on this).
Fifty years ago, women faced far fewer work opportunities than today. Thanks to birth control, labor-saving technology, non-descriminatory higher education, and a shift toward services in developed economies, today women are essentially interchangable with men in labor markets. That means women are acting more like “men”—pursuing careers and individual economic self-fulfillment, rather than forming family, which was often the only option a century ago.
Rising wealth and incomes have had a similar effect. What’s the opportunity cost of having six children? For a farm family in Iowa in 1900, not much. But a college-educated couple in Manhattan in 2004? Probably a lot.
And that, of course, is a good thing. A society with rising opportunity costs for women is a good one by historical standards. There’s a mountain of evidence that the single best predictor of economic well-being of a country is the socio-economic status of women. If birthrates are falling because women have the same opportunities as men, well, I’d say we’re doing a damn good job.
So from the perspective of individual women making rational decisions to bear fewer children, slower population growth is a uniformly positive trend. And European politicians calling it a “crisis” just confirms what we already knew—self-interest is universal.
Posted by Andrew on Monday March 15, 2004 | Feedback?
