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[Kathryn Anne Edwards] America's fertility policy gap is bad economics

By Korea Herald

Published : Aug. 14, 2024 - 05:33

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Even if you didn’t care about or respect women’s choices when it comes to having children, the “childless cat ladies” comments from Donald Trump's running mate JD Vance are still deeply problematic because they suggest a misunderstanding of a vital policy issue: fertility.

To the extent that this deeply personal choice can be aggregated and tracked, it is akin to a performance measure of the economy -- and the data is flashing red. The US fertility rate has been falling for 15 years and by some measures is below what is needed to grow the population. Time is running out to craft smart, effective policy that reverses the trend by lessening the financial cost of having and raising children with things such as paid family leave, health insurance coverage for assisted reproduction and making child care more accessible.

The US has never had a fertility policy because there was no need to have one. After the Baby Boom, the period between 1946 and 1964 when the fertility rate shot up from around 85 births per 1,000 women to as high as 123, fertility fell for about 10 years and then stabilized at its modern norm of around 65 for about 30 years. But around 2008 and 2009, the rate began to fall, perhaps initially because of a deep recession tied to the global financial crisis at the time. But it continued to drop, declining to around 56 even as the economy recovered and has persisted through almost five years of record-low unemployment just before and after the pandemic.

An innocuous, albeit problematic, explanation for the modern decline is that families have simply shifted their preferences to wanting fewer or even no children. But that's doubtful. What's more likely is that families want to have children and more of them but are thwarted by circumstances. A New York Times/Morning Consult survey asked parents why they weren’t having more children and among the top responses were child-care costs, general affordability and too little or no paid leave. The Brookings Institute has estimated that a middle-income family with two children will spend more than $300,000 to raise a child born in 2015 to age 17.

What's important to know is that the fertility rate is a point-in-time metric, measuring babies born in a year. The other way to measure fertility is cumulative, measuring how many babies in total were born to women who are near the end of what we believe to be childbearing age. That measure of fertility hasn’t yet shown a decline.

These two trends aren’t contradictory, as they reflect a generational transition to having children at later ages. Cumulative fertility will continue to hold steady if women who have delayed childbearing "catch up." The good news is that researchers have concluded, for the most part, they want to catch up.

On average, the number of children women say they want to have is relatively stable and above replacement (two children per family). This does not mean preferences are uniform, as recent surveys suggest the share of adults who do not want children and those who want large families are both rising, but the average is stable.

But make no mistake, it's a perilous moment for fertility in the US and there is a role for policy.

A good place to start is by addressing the physical circumstances connected to the decision to have children. The Centers for Disease Control and Prevention estimates that one in five married women will not be able to conceive after a year of trying. Assisted reproduction, such as in vitro fertilization is effective but can be too expensive, costing as much as $30,000 per cycle. Plus, it’s not commonly covered by insurance.

The economic circumstances are more complicated. It's costly to have and raise a child. But there are certainly some potentially easy wins for policy, such as eliminating the out-of-pocket costs for labor and delivery, which even in the best private employer plans can run into the thousands of dollars. Sure, it's a small move in the scheme of things but at least it would remove the incongruity of desiring higher fertility while charging for childbirth.

In that vein, America needs universal paid family leave, funded via payroll taxes split by employer and employee and added to Social Security’s portfolio. Some 75 percent of private sector workers don’t have it, meaning childbirth comes with a reduction in income and possibly the loss of a job.

Fertility is a tough policy target, and these ideas aren't guaranteed to lead to the desired results. Other countries have similar policies and still struggle to keep fertility at replacement levels. And policy can’t change choices; it can only help change circumstances. Yet, it’s a cruel reality that many Americans won't have as many children as they'd like for reasons the government could help address. That reflects poorly on policymakers, not families.

Kathryn Anne Edwards

Kathryn Anne Edwards is a labor economist and independent policy consultant. She wrote this for Bloomberg. The views expressed here are the writer's own. -- Ed.

(Tribune Content Agency)