Missing Children

Most everyone knows that Europeans are fading in number. Yet the most dramatic declines in fertility are occurring just where you’d least expect them. Even under the tight grip of an Islamic theocracy, for example, Iran has seen its fertility rates plunge to level that will lead to long-term population loss. The same is true of Mexico and most of the rest of Latin America. Americans have a long history of fearing the Asian hordes, yet countries like China, Japan, and Korea now face the prospect of losing up to one third of their populations over the next generation.

All told, global fertility rates are half what they were in the early 1970s. The primary reason appears to be the rapid movement of people from farms to cities (nearly half the world’s population today lives in urban areas), and the increasing social and economic opportunities available to women. Because of the large numbers of women still in childbearing age, world population will continue to grow for several decades, even as the average woman has fewer and fewer children. Yet within the lifetime of today’s young adults, most demographers now believe, world population could well be falling. Long before then, the average age of the world’s citizens will increase dramatically, leaving many fewer working aged people available to support each elder. Two recent books document these trends and explore their long-term implications. Ben J. Wattenberg, a senior fellow at the American Enterprise Institute, wrote one. I wrote the other. I suppose you can guess which book I think is more insightful.

That bias disclosed, let me hasten to say that Wattenberg and I essentially argue from the same facts. We both, for example, rely heavily on data and projections developed by the United Nation’s Population Division, which in recent years has been ratcheting down its estimates of future population. By 2300, the United Nations projects that world population could be below the level of 1960, and that the United States will shrink back to the population it had in 1950only with a far greater share of elders. Both Wattenberg and I point out that if current trends in fertility continue, depopulation will be much more extreme. For example, this U.N. projection assumes, for no particular reason, that fertility rates in the developed world will rise substantially. It also assumes, for no particular reason, that as today’s underdeveloped regions become more industrialized, they will never experience the same fall in fertility that China, South Korea, and other recently industrialized nations have experienced.

Both Wattenberg and I also agree that falling fertility rates can bring economic benefits, at least in the short term. Wattenberg notes, for example, that while Korea’s birthrate was plummeting between 1965 and 1990, real per capita income growth rose by 6 percent per year. As the relative number of children declined, so did the burden of their dependency. With fewer children to look after, more women could join the paid work force, thereby boosting measured GDP.

But if falling birthrates can bring a demographic dividend, that dividend eventually has to be repaid if the trend continues. Wattenberg is right, I think, to warn that an aging and declining population leads to economic stagnation and exploding public debt, such as we now see in the world’s oldest nation, Japan.

On some important matters of interpretation, however, Wattenberg and I differ sharply. Perhaps most importantly, Wattenberg is a big believer in American exceptionalism. In a chapter titled America the Exceptional: the Baby Makers, he stresses that America has the highest fertility rate of any industrialized nation. This, combined with America’s high rates of immigration, leads him to see a future of increasing American dominance in world affairs. With more rapidly aging, and eventually falling populations, countries like China, Russia, France, and Germany will simply be unable to compete with the fecund United States, Wattenberg concludes.

I’m not so sanguine. The United States does have the highest fertility of any industrialized nation, but American fertility rates, which are already below replacement levels, are drifting downwards, and there is every reason to believe that they will converge before long with the low birth rates of Europe and Japan.

The last time white Americans made enough babies to replace themselves was 1970. Now the trend toward low fertility has spread to every major racial and ethnic group. Between 1990 and 2002, fertility declined by 14 percent among Mexican Americans and by 24 percent among Puerto Ricans. African Americans, according to the National Center for Health Statistics, now have a lower fertility rate than whites and are no longer producing enough children to replace their population.

The same is true of American Indians and Asian Americans. Moreover, recent immigrants are also producing fewer and fewer children. They tend to be much better educated than in the past, and to be drawn from countries that are themselves experiencing rapid plunges in fertility.

All this is good news in itself. Fertility correlates strongly with economic opportunity. The more economic opportunity you have, the more you give up if there is a baby on your hip. As more and more members of historically disadvantaged groups get a chance to finish high school or go to college, it’s to be expected that their average family size would drop. But there’s just one problem. As the trend unfolds, U.S. fertility rates will drop further and further below replacement levels, causing rapid population aging and eventual population decline.

Is the United States prepared to meet this challenge? In many ways, we are more vulnerable to population aging than the oldest nations of Old Europe. That’s primarily because of the extraordinarily high cost and inefficiency of the U.S. health-care system. For example, in the United States, health-care spending per person 65 and over is more than double what it is in Japan, and more than three times what it is in Great Britain. For all this extra spending, U.S. seniors don’t enjoy any advantage in health and well-being. Indeed, at age 60, American women can look forward, on average, to 3.8 fewer years of healthy life than their counterparts in Japan, while American men at the same age share nearly the same disadvantage. Says Christopher Murray of the World Health Organization: Basically, you die earlier and spend more time disabled if you’re an American rather than a member of most other advanced countries.

This means that America faces a huge comparative disadvantage when it comes to aging. Only 12 percent of the population of the United States is 65 or older, yet the cost of their health care already amounts to 5 percent of GDP. That’s far more than we spend on national defense and equal to about one-quarter of all federal spending. By contrast, in Great Britain, where nearly 16 percent of the population is 65 or over, the cost of their health care consumes only 2.8 percent of GDP. Going forward, this means that the United Kingdom can afford far more seniors than the United States canat least, that is, until the United States adopts something like the British health-care system, which for now seems unlikely.

Wattenberg and I also diverge on what, if anything, should be done to keep U.S. fertility rates from declining further. Wattenberg’s roots are in neoconservativism, so one might expect him to have an ideological objection to government programs that would ease the strains on young parents. But instead his objection is practical. Such programs may indeed be good on their own merits, he writes. But the fact of the matter is that pro-natalism as a means of seriously boosting fertility has not worked well. But that’s not quite right. In Europe, the countries with the most generous family allowance and paid maternity leave such as Sweden, Norway, and France, have much higher fertility rates than countries that offer parents few if any breaks, such as Spain and Italy. Moreover, the idea that government policy can do nothing to influence how many children people have flies in the face of the American experience.

After World War II, the GI bill dramatically lowered the cost of home ownership for millions of young Americans. Its educational benefits also allowed millions of men still in their twenties to start earning nearly as much as their fathers. The bill’s purpose was not to create a baby boom in the United States. But that is what it did. There was no commensurate increase in birth rates after World War I or any other American war because there were no commensurate policies creating upward mobility among the young. The GI bill is a good example of how government policies, even when not explicitly pro-natal, can make the economics of parenthood less punishing and thereby enable more people to afford to raise the children they want.

Today, in both Europe and the United States, women coming to the end of their reproductive years report that they did not have as many children as they would have liked. Such statements suggest an implicit demand for children that is not being met. The reasons for this trend are complex, but many are clearly within the power of government to ameliorate.

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Phillip Longman

Phillip Longman is the senior editor of the Washington Monthly and the policy director of the Open Markets Institute.