Americans aren’t having babies, and the economy’s to blame.
After all, who has enough cash to save up for food, clothing, college for another human being? Due to the recent recession, the fertility rate has fallen to its lowest point in 25 years.
The fertility rate is measured as the average number of children per woman, and right now the American rate is down to 1.87 children per woman. This number represents a sharp decrease of 12% since 2007.
Kids are expensive (obviously), so when the economy is shaky, it makes sense for individuals to reevaluate whether they can really afford to have their first child, or add a second child to their family. But while this thinking is prudent on a personal finance level, this trend is potentially dangerous for the economy as a whole.
We’ll break down what lower fertility could mean for the economy … and how this trend could potentially improve motherhood in the United States.
As Countries Develop, Fertility Rates Usually Drop
In the United States, for instance, the average fertility rate was 3.67 children per woman between the years of 1875 and 1925, dropping to a little above 2 children per woman in the second half of the 20th century. And that’s a good place to be, because 2.1 is the fertility rate sweet spot: It’s the replacement rate, ensuring that a country’s population doesn’t decline over time. (Because two parents each replace themselves, and then some. Get it?)
Many European and Asian countries in the past few decades have struggled to maintain this replacement rate, falling closer to an average of one child per woman. This leads to an increasingly aging population. For many years, the United States was seemingly immune to this trend—until now.
At first glance, a lower fertility rate would seem to have positive implications for an economy. A country’s government would spend less on education costs; mothers would be able to return more quickly and easily to the workforce, which would increase productivity; and families would have more expendable income, which helps consumer spending.
But these short-term benefits are quickly outweighed by the more serious long-term consequences.