US Birthrate Continues Decline; Should Government Encourage Having Babies?

Lawmakers from both major political parties in past years have agreed to assist families in various ways. But should government encourage Americans to produce more children amid a steadily declining birthrate?

That topic could get more discussion time, according to The Wall Street Journal on Monday, as federal statistics released in May showed the number of babies born in the U.S. last year was the lowest in more than four decades. The overall fertility rate fell to the lowest on record since the government began tracking it in the 1930s.

The rate is below what experts consider the “replacement rate,” the number of new babies needed to keep the population level stable.

Although the coronavirus pandemic likely affected the birthrate starting late last year, that doesn’t explain why U.S. births dropped in all but one year from 2009 until early 2020.

This is not just an American issue, however. Japan, Italy, and Germany have fertility rates lower than the U.S.

The U.S. government already has created such things as child tax credits, government-funded preschool programs, and removal of marriage penalties from the tax code to try to help younger parents and their families.

However, the WSJ said talk about going further, encouraging people to produce more children, will be next. Potential federal programs achieving that goal could include financial inducements and new services.

Despite growing discussion, the WSJ reported many people believe that having children is a very personal issue and aren’t sure the government could steer birthrates even if it tried.

The “preferred fertility rate,” based on how many children women desire to have, generally has reported women preferring to have more children than they actually were having in recent decades. Delayed childbirth and economic reasons, such as the costs of child care and education, have impacted that.

Some experts say declining birthrates certainly can hurt a society.

“Slower population growth will lead to rising inequality, growing prominence of inherited wealth, increasing monopoly power by existing firms, and a decline in entrepreneurship and innovation,”” Lyman Stone, a demographer at the American Enterprise Institute, said in a recent paper.

“Demand for new housing will stagnate. Intergenerational transfer programs like Social Security (or private life insurance, or even the stock market) will face financial troubles.”

There could be some advantages to a lower birthrate, though.

“With fewer children to support, parents and society can both invest more in each child, helping them to climb the ladder and become productive citizens in their adult years,” wrote Isabel Sawhill, a scholar at the Brookings Institution and former associate director of the Office of Management and Budget.

The WSJ said immigration could more than offset any decline in U.S. births, but a rise in anti-immigrant sentiment around the country could make that unlikely.

Some nations have tried, with limited success, to encourage their citizens to have more babies.

Singapore offered parents paid maternity leave, baby bonuses, some measure of paid child care, and tax savings to increase childbirths — yet its birthrate remains well below the U.S. rate.

Australia (via a financial baby bonus), France (cash transfers), and Israel (child allowances) have tried to increase birthrates. But childbirth increases seen in those countries were temporary to take advantage of short-term policies.