Why a decline in US birth rates could actually help our economy 

Americans are waiting longer than ever to have children. 

newborn baby
The average birth rate dropped two percent since 2017—highlighting a steady decline since the Great Recession in 2007.Deposit Photos

The United States' birth rate fell for the fourth year in a row, reaching its lowest level in more than three decades, according to the CDC’s 2018 National Vital Statistics report, which reflects the most up-to-date information on birth statistics (it takes about a year to analyze the data).

The report, which collected its data from 3.79 million birth certificates, found the average birth rate dropped two percent since 2017—highlighting a steady decline since the Great Recession in 2007. Total fertility rate is the expected number of children a woman would have over her entire child-bearing lifetime—calculated as the ages between 15 and 44. In 2018, the fertility rate in the US was 1,729.5 births per 1,000 women. According to the CDC, replacement fertility rates are 2,100 births per 1,000 women. That means each woman needs to have at least two babies to replace the parents as well as account for early deaths.

These fertility rates are an important measure of a country’s demographic stability because high birth rates mean a strain on accompanying resources like housing. Meanwhile, when birth rates are too low, like in Japan and Russia, a country’s workforce will not be able to support its elderly. But according to experts, these issues are unlikely to happen in the United States as the US population remains relatively steady thanks to immigration.

“I don’t think the birth rate falling is of concern. The total fertility rate has been below replacement in the United States since 1971, but we are still growing because of immigration,” says William Frey, a demographer and senior fellow at the Brookings Institute, a social science research group in Washington, D.C. “That is one of our country’s strengths in terms of population growth and labor force growth.”

Because the total fertility rate is derived from the general fertility rate—the number of children born per 1,000 women in a given year—it fails to account for women postponing childbirth. In 2018, the birth rate declined in all age demographics except for women aged 35 to 44, which saw an increase. This reflects the growing trend of women postponing having children.

“There is a phenomenon happening that’s difficult to capture with these measures, especially total fertility rate, which is women, when faced with choices about education and occupation, can delay having a child,” says Brady Hamilton, an author of the study and statistician demographer at the National Center for Health Statistics. “If you could accurately follow women throughout their lives you would be able to address this issue, but you can’t. That’s why there are caveats when looking at this information.”

Frey found that of new mothers between the ages of 35 and 39, almost a quarter had their master’s degrees or obtained PhDs and over half of them had their college degrees. As women continue to join the labor force and play larger roles in their professions, they tend to wait to start a family until after they’ve become established in their careers.

“There is a broader transformation in young adulthood where there is an increasing prominence in education, career building, human capital, and so forth so that children tend to be desired later in life,” says Hans-Peter Kohler, a professor of sociology at the University of Pennsylvania who studies long-term trends in demography.

The declining birth rate can be traced back to 2007 when the Great Recession hit millennials hard. Without proper savings and the ability to buy a home, most millennials delayed major life events like getting married and having children. According to Frey, millennials want to establish a strong financial foundation before having children to ensure they can send them through college.

In addition to the increasing fertility rate of older demographics, the first birth rate—the age of the mother when she gives birth to her first child—also saw an increase. The first birth rate is. In 2018, the age was 26.9 years which is up from 25.4 in 2010 and 21.4 back in 1970.

Not only does the desire to have children later in life boost this number, but so does access to contraception and proper family planning—both factors that contributed to a decline in teen pregnancies. As of 2018, birth rates for females aged 15 to 19 fell seven percent, another record low.

“That’s very encouraging news. It’s really quite phenomenal,” remarks Hamilton when asked what was most significant in the study. The last few years have seen an average decline in teen pregnancies of seven to eight percent.

Despite other high-income countries like Russia and Japan experiencing similar trends—and consequently struggling to support their aging population—the US’s decline in birth rate isn’t as severe. Instead of being detrimental to the United States economy, Kohler argues, the declining birth rate could have some benefits like providing more opportunities for younger generations in the workforce.

“While the replacement fertility rate ensures demographic stability, it does not ensure economic growth or well-being,” says Kohler. “Some would argue that the fertility rate in the US might actually be better in terms of long-term consumption patterns or economic benefits.”