The baby factory
Remember when overpopulation was making headlines? So much for that. The new demographic crisis du jour is underpopulation caused by falling birthrates worldwide.
In the last 30 years, birthrates have plummeted in rich countries, and poor countries are beginning to follow suit. By 2045 world fertility rates will have fallen below replacement levels. By 2070 demographers predict world population will peak at 9 billion, and begin slowly contracting thereafter.
So what? Well, there’s a growing consensus that falling birthrates are a social problem with bad economic consequences. A recent article from Phillip Longman in the current issue of Foreign Affairs is representative.
In it, Longman argues rising average ages means fewer young productive workers and more dependent elders, and this threatens to bankrupt pay-as-you-go social insurance programs. Declining population also means lower total GDP growth potential, and lower total tax revenue. Population aging may also slow technological innovation and entrepreneurship, which tend to flourish among the youth. And so on. His conclusion? States need a policy solution to correct this, and boost birthrates.
In econ-speak, this is an argument about externalities. Saying “childbearing has social consequences”—rather than individual—is really saying “babies cause positive externalities” for the rest of society.
So do they? In one sense, of course. By giving birth to Thomas Edison, Mrs. Edison generated lots of social benefits she didn’t take into account before getting pregnant. But what about Ted Bundy’s mother? If we count benefits, we have to count costs, too. Back when overpopulation was making headlines, it was argued that babies give off negative externalities, in the form of strain on urban infrastructure, environmental destruction, etc.
Which claim is true? That’s an empirical question. Unfortunately, it’s one that’s probably unanswerable even conceptually. That’s why—when deciding if falling birthrates are a social problem—we should probably look at more than aggregate consequences. We should also look at causes, at the level of individual mothers.
From Longman:
... the changing economics of family life is the prime factor in discouraging childbearing … [A]s more and more of the world’s population moves to urban areas in which children offer little or no economic reward to their parents, and as women acquire economics opportunities and reproductive control, the social and financial costs of childbearing continue to rise.
So the main causes of falling birthrates are urbanization, rising wealth, and the improved status of women. As I’ve written before, all these are good things (see here). And because of the overwhelming force of these economic and social trends, there’s almost certainly no way to boost overall birthrates without halting or reversing at least one of these factors.
If there ever was a cure worse than the disease, a policy that encouraged more babies at the expense of halting the trend toward making women less equal—and all of us poorer—would definitely be it.
Posted by Andrew on Thursday May 27, 2004 | Feedback?
