Here’s a piece of news from late last week that I certainly can’t let pass without comment. As reported in the above-linked article, the U.S. fertility rate has declined from 2.12 in 2007 to 1.87 today, and is projected to decline further to 1.86 next year. The reason for the decline, according to Demographic Intelligence, the company that gathered the data, is the economy. Student loan debt and job insecurity makes it impractical for twenty-somethings to consider having children.
It’s an interesting observation. Prior to the renaissance and the industrial revolution, poverty held the world’s population in check. In recent centuries, economic development drove down death rates much more quickly than birth rates, fueling a population explosion. Economic development and population growth became synonymous in the minds of economists. But they are not synonymous. They were cause and effect, up to a point – the point where overcrowding becomes an impediment to per capita consumption. Now, the cause and effect have reversed. Population growth has strangled economic development, driving up unemployment and poverty. And now, poverty is resuming its role as the mechanism that will hold the population in check. Not only is poverty driving up the death rate but, as this article makes clear, it’s reining in the birth rate as well.
A fertility rate of 1.86 is very close to the rate of 1.79 that I calculated as necessary to achieve a stable population. (See page 178 of Five Short Blasts.) A rate of 2.0 is what’s considered a “replacement rate,” the rate necessary to replace each previous generation with one of the same size. But as long as life expectancy increases, then a rate less than 2.0 is required to achieve a stable population.
A declining fertility rate – finally approaching the rate needed to achieve a stable population – is great news. But what happens now? Will hand-wringing economists convince policy-makers that a stable population is a threat to macro-economic growth and that we need to flood the country with even more immigrants? What a mistake that would be.