U.S. Birthrate Falls -- Again

January 28, 2015 | By Neil Howe

This editorial originally appeared in Forbes.

Many believed that when the U.S. birthrate held steady in 2012, we had finally seen its nadir. But according to the NCHS, the birthrate again dropped to a historic low in 2013—disappointing a whole industry of forecasters waiting for a strong rebound. Some say that this is just a temporary setback, and look for gains in employment and wages to push fertility back up in the near future—like they have following other recessions. Yet others argue that a birthrate recovery will be more complicated, citing longstanding, non-economic drivers as the main culprit. The truth—and the key to future recovery—probably lies somewhere in between.

Birthrates have fallen across the board. The absolute number of births fell by 20,000 from 2012 to 2013, even as the number of women in their prime childrearing years (ages 20-39) continued growing. And the crude birthrate—the number of births each year per thousand women ages 15-44—fell to 62.5 in 2013, the lowest level ever recorded. Though not at a similar record low, the total fertility rate (a calculation of how many children a woman would bear over a lifetime if she experienced fertility rates at every age in the current year) fell to 1.87—the lowest we’ve seen since 1986.

Absolute Number of Births Per Year (2000-2013)

Absolute Number of Births Per Year (2000-2013)

What concerns experts is not the fall itself, but the fact that it accelerated when we were supposedly experiencing an economic recovery. In 2008, birthrates began falling dramatically before bottoming out in 2011. However, the numbers largely leveled off in 2012, leading many to believe that a rise was imminent and that birthrates would recover steadily along with the economy. But now, even as the economy shows modest signs of improvement, birthrates have dropped yet again.

The continuing decline may indicate that the economic recovery, such as it is, isn’t affecting women of childbearing age. Despite aggregate economic growth, the average GDP per worker has risen faster than the average wage. And the average wage is rising faster than the median wage, the measure relevant to the most people. What’s more, median wages for the vast majority of new mothers have been particularly hurt: Early-wave Millennials and early-wave Xers experienced the largest median wage declines of any age group—and late-wave Xers’ median wages increased by a paltry 0.1%.

Further evidence of the link between income and fertility is news that the birthrate of immigrants fell the most of all subgroups in 2013. The crude Hispanic birthrate fell 2% from 2012 to 2013, the largest decline among any ethnic group. To be sure, this group’s birthrate was falling before the recession even began, but the economic downturn has amplified the trend: Hispanic (both foreign- and U.S.-born) rates of poverty and unemployment grew more sharply than those of the general population following the recession.

Regardless of the extent to which the economy affects fertility, demographers also disagree about the timing of that effect. If women have fixed lifetime birth expectations, then they may react to a short-term economic downturn by not having kids—but have them later when they can’t wait any longer, regardless of the economy (a phenomenon known as the “tempo” effect). Possible evidence of this is the fact that nearly all of the recent fertility decline has been among women under age 30—those who presumably believe that they can afford to wait. What’s more, polls find that Americans without kids “want to have children someday” even more than they did before the recession.

All this points to a possible fertility rebound in the near future. But we can’t be too sure. History provides many examples of long eras of low fertility that did ultimately cause an entire generational group of women to have significantly fewer children than they at first intended. Just look at the 1930s: About 22% of women who began their childbearing years at the onset of the Great Depression never had children at all. (Contrast this with the much smaller share—only about 10%—of childless women who came of age just after World War II.) This effect may be relevant again today.

Still other demographers point to non-economic drivers. For starters, young women’s birthrates have been declining for decades independent of the economy—due to growing wages for women (which increase the opportunity cost for having children), later marriages, rising college attendance, and a drop in unplanned pregnancies. However, none of these factors explain the sudden post-recession drop.

A driver that fits the timeline better is the recent decline and shifting composition in immigration. Immigrants have for many decades bolstered U.S. fertility because of Hispanics’ higher birthrates. But now, the fertility of Hispanic women has declined, and less-fertile Asian immigrants have displaced them as the country’s leading immigrant group. Yet another intriguing explanation with a plausible timeline is the introduction of MTV’s 16 and Pregnant, which researchers found may have lowered the teen birthrate by as much as 5.7%.

So where will America’s birthrate go from here? As we’ve seen, some of it depends on the degree to which we are seeing a tempo effect. Will the rate bounce back once the economy does, or will potential mothers be forever lost? And non-economic factors will play a part as well.

But most of all, the birthrate will depend on the pace of economic recovery. Indeed, history has shown a tie between fertility and income. In The Great WaveDavid Hackett Fischer finds a solid link over many centuries between fertility booms and economic booms marked by growing aggregate demand, accelerating investment, and rising prices. This causal relationship goes both ways. A growing population boosts consumer demand while the expectation of economic growth incentivizes parents to have more kids. The 1950s and 1980s were decades when this virtuous cycle seemed fully energized. Over the last few years, as in the 1930s and 1970s, this cycle seems to have broken down.

Connections