Economic uncertainty and expanding opportunities for women have lowered the US birth rate – and it could lead to future labor shortages

couple on couple looking at phone reading newspaper
Economists estimate that a family will spend on average $233,610 per child before they are 18 years old.

  • From 1950 to 2021, we saw a 50% decline in US birth rates, from 25 births per 1,000 people to 12.
  • Sociologist Ann Oberhauser says the decline is tied to progress in areas like reproductive medicine and access to education.
  • Lower fertility rates could translate to possible future labor shortages in many sectors of the economy.
  • See more stories on Insider’s business page.

The decline in population growth in the US from 2010 to 2020 is part of a broader national trend linked to falling birth rates, but also immigration changes and other factors. In May of 2021 the scope of that change became clear, with a record low of 55.8 births per 1,000 women of childbearing age in 2020, a 4% drop from 2019. Other countries are facing similar slowdowns in population growth.

This shift has been underway in the US for many years.

In the early 1900s, my grandfather grew up in a family with nine children in rural Iowa. They all worked hard to maintain the farm and support the family. Some of the children left the farm to attend college, start families, and find work elsewhere. My father grew up in a city and worked as an adult to support his family as the sole income earner.

Read more: Rich people are having babies, and it’s putting pressure on the market for private nurses and luxury products

The next generation, the baby boomers, was raised during a period of economic expansion that accompanied an uptick in fertility – the average number of children born to a woman in her reproductive years. Post-boomer generations have had fewer children, contributing to a 50% decline in US birth rates between 1950 and 2021, from 25 births per 1,000 people to 12.

Economic opportunities, social norms, and changing gender roles – especially expanding education and employment options for many women – help to explain why fertility has slowed in the late 20th and early 21st centuries. That change has repercussions for trends in workforce numbers, employment, health care, housing, and education.

Explaining the decline in fertility

Each generation experiences unique circumstances that affect fertility. The overall trend in declining birth rates, however, is largely due to women’s changing roles, employment shifts, and advances in reproductive health.

After World War II, the US saw rapid change in gender roles with the expansion of women’s education and entry into the labor force. Starting with the baby boom period from 1946 to 1964, many middle- and upper-class women had increased opportunities to get an education beyond high school, which had typically been the end of women’s formal education.

In 1950, only 5.2% of women had completed four years of college or more. By 2020, this proportion rose to 38.3%.

In comparison, 7.3% of men completed at least four years of college in 1950 and 36.7% in 2020 – a smaller increase than for women.

Increases in college education and rising employment among women tend to delay motherhood. Women with higher educational levels, especially unmarried women, tend to put off childbearing until their early 30s.

In addition, medical advancements and federal regulators’ approval of the birth control pill in the 1960s expanded reproductive freedom for women.

This situation contributed to women’s becoming mothers later in their lives. For example, the median age for first-time mothers among women who were born in 1960 was 22.7 years, compared with 20.8 years for women born in 1935.

Moreover, the teen birth rate was a record low in 2019, with 16.7 births per 1,000 girls and women ages 15 to 19. Birth rates remain higher, however, among Latina and Black teens than teens who are white or Asian. In contrast, the share of women ages 40 to 44 years who have ever had children increased from 82% in 2008 to 85% in 2018. Foreign-born women tend to have higher birth rates than US-born women.

Geographic location also reveals important differences in the US birth rate. Women in New England have fewer children, partly because of higher levels of education. In contrast, women in the South and Great Plains have among the highest birth rates in the US.

Finally, economic uncertainty affects fertility trends. Economists estimate that a family will spend on average $233,610 per child before they are 18 years old. Financial upheaval during the Great Recession from 2007 to 2009 also contributed to declining birth rates, while the COVID-19 pandemic saw a 4% decline in fertility rates in 2020, the lowest since 1979.

A look at the future

Fewer babies and young people and a growing older population will undoubtedly affect future generations.

Several developed countries in Europe have also experienced declining fertility rates, with widespread social and economic impacts. In Italy, for instance, rapid drops in fertility have led to closing hospitals and schools. In 2019, the average Italian family had 1.2 children, part of a declining trend since the 1960s, when it was more common for families to have four children. As a result, Italy’s percentage of seniors is second only to Japan, with growing concern for future labor supplies.

In the US, lower fertility rates translate to fewer working-age people and possible labor shortages in many sectors of the economy. According to the US Census Bureau, the percentage of people age 65 and older has been growing, increasing by one-third since 2010.

Many economists and social scientists recommend a restructuring of work to support and retain the shrinking number of workers. These recommendations include more flexible work conditions, access to quality and affordable child care, immigration reform, and job security. Several of these measures would provide much-needed support for parents and particularly women in the workforce.

Second, living spaces and residential housing may also have to accommodate this growing elderly population with arrangements that include assisted living, retirement communities, and ways for people to age in place. These housing changes would help women in particular, who live longer than men.

Third, health services such as insurance, medical care, and employment will have to adjust to these demographic shifts as more resources are needed to support an older population.

Finally, declining fertility rates are a growing concern for educators and policymakers. The so-called “demographic cliff” will inevitably lead to school closings and consolidation, and declining student recruitment and enrollment in the US. One projection is that there will be 10% fewer college students in 2054 than today.

The overall decline in fertility rates has far-reaching effects on society and future generations. In the early 1900s, college education and a career were not options for women like my great-grandmother. Advances in reproductive health and women’s expanding access to education and employment have produced a demographic shift with implications for work, housing, health care, and education.

Ann M. Oberhauser, professor of sociology, Iowa State University

The Conversation
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The declining American birth rate is unlikely to bounce back, new study says

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Today’s baby bust looks unlikely to turn into a delayed baby boom.

That’s according to the latest research from Melissa S. Kearney and Phillip Levine at the Brookings Institution, who say that births in the US are unlikely to rebound. The research comes on the heels of a recent CDC report that found the US birth rate fell by 4%, the sharpest single-year decline in nearly 50 years and the lowest number of births since 1979.

The total fertility rate – or the number of live births a woman is expected to have over her lifetime – also fell from 2.12 in 2007 to 1.64 in 2020, below the 2.1 replacement fertility rate needed for the population to naturally replace itself.

Declining birth rates during an economic downturn are typical. But the recession of 2020 was paired with a global health crisis, which could yield a stronger impact. Demographers are currently debating whether the current drop will prove to be a temporary or permanent phenomenon: Will women will end up having babies at a later date or have fewer babies overall?

Brookings’ analysis implies the latter, that US fertility rates will be below replacement levels for the forseeable future. Considering that women who were born in 1975 to 1980 had an average of around 2.2 total lifetime births, Brookings took a look at expected lifetime births for more recent age cohorts.

It forecasted the total number of children ever born based on simulated age profiles of women in the 1985 to 2000 birth cohort under conservative, moderate, and aggressive scenarios. For each cohort, the total number of children ever born per woman continues to further fall. The forecasted fertility rate for the 2000 cohort is 1.44 conservatively, 1.77 moderately, and 1.92 aggressively, all well below the replacement fertility rate.

That is all to say, women are expected to have fewer babies going forward.

A decline in births could reshape the economy

This trend isn’t just another fallout from the pandemic, according to Brookings. It follows a decade of declining births for multiple cohorts of women as they wait to have babies until a later age. The simulated fertility rates, Kearney and Levine wrote, are similar to those in high-income countries.

Christine Percheski, associate professor of sociology at Northwestern University, recently told Insider that the US has been slow to fall in line with worldwide birth trends. “It’s about women having access to education and employment opportunities,” she said. “It’s about the rise in individualism. It’s about the rise in women’s autonomy and a change in values.”

Macroeconomic forces are another major factor in the decision to postpone having kids, a reflection of how expensive the US economy has become. Millennials have grappled with the lingering effects of the Great Recession and soaring living costs for things like housing and, of course, childcare.

If Brookings’ analysis proves to be true, experts are worried the US is entering a demographic crisis that would result in an economy with an aging population that isn’t replaced by enough young workers. It could yield higher government costs and a smaller workforce that would have to front the care costs for aging populations, creating a shortage of pension and social security-type funds.

Read more: The declining American birth rate could actually be good for the economy

But Mauro GuillĂ©n, Wharton professor and author of “2030: How Today’s Biggest Trends Will Collide and Reshape the Future” told Insider in April that the decline in births is a “temporary blip,” likely to last one to two years.

“Young couples have said, ‘Give me a rain check, I don’t want the baby now because there’s too much uncertainty,'” he said. “But they will have those babies later. They don’t cancel their plans to have babies for life.”

Regardless of what happens, a declining birth rate doesn’t have to mean devastation for the economy. It will undoubtedly be an economic shift, but such change isn’t necessarily bad. It just requires structural adjustments, like creating new policies that accommodate to changes in population in size, and for people to welcome a reshaped economy with open arms.

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China’s dropping fertility rate means its military has to work harder to find new troops

china military recruits
Chinese paramilitary recruits during regular training in Nanjing, January 24, 2007.

  • The People’s Liberation Army has expanded its sources of troops, including lowering education, height, and eyesight requirements.
  • China’s recent census showed the 2020 fertility rate was 1.3 children per woman, below the level needed for a stable population.
  • See more stories on Insider’s business page.

As the world’s largest military, needing hundreds of thousands of new recruits each year, the People’s Liberation Army has been affected by China’s wider fertility and ageing issues, and tried to counter them.

The gathering pace of the PLA’s modernisation has given its instructors and recruiters the challenge of how to train a newer breed of soldier, experts said.

“Military instructors found the strict and dogmatic training modes applied in the last century didn’t work for the more individual young soldiers born in the 21st century,” said Zhou Chenming, a researcher from the Beijing-based Yuan Wang military science and technology think tank.

“Some even dared to butt against and challenge superiors when they were not happy. The military was forced to adjust. Some military instructors tell me they are still muddling through how to take charge of younger generations.”

Chinese troops
Chinese troops.

Rather than only orders and scolding, therapy sessions by professional psychotherapists have been brought in since 2011 to ease stress, according to military mouthpiece The PLA Daily.

That can help middle-aged instructors and senior leaders to better understand the new generations, but also provide data for designing new training modules such as computer war games and virtual reality training, the PLA report said. In the past, the military would leave soldiers’ morale and personal well-being to political commissars.

Physical fitness has been another tough challenge for the PLA since the military shifted its recruitment targets from peasants’ children to rural youth with a higher education level in 2000, when the military stepped up a massive equipment and weapon systems replacement.

To command and operate increasingly advanced and sophisticated weapon systems, the military recruited more than 120,000 college graduates in 2009 – the largest intake since the Communist Party regime was established in 1949. That trend has since been the norm, according to the defence ministry.

The ministry has started to adjust conscription requirements to make sure they could recruit enough qualified college students. For example, since 2014, it has lowered height requirements from 162cm (5 feet, 4 inches) to 160cm for men, and 160cm to 158cm for women, as well as lowering the bar a little for short-sighted and overweight applicants.

After protests by young soldiers against a ban on mobile phones, the army in 2015 lifted the restriction, provided that soldiers installed the army’s anti-spy software that allowed the newly established internet administration centres to closely monitor their activities.

Chinese China PLA army cadet robot
A Chinese People’s Liberation Army cadet adjusts dancing humanoid robots at the PLA’s Armored Forces Engineering Academy in Beijing, July 22, 2014.

The PLA had an extra round of conscription last year, allowing university graduates who failed to find jobs to enlist.

“To expand sources of troops, the PLA has also started recruiting high-school graduates who are not qualified enough to be admitted to university,” Zhou said.

“The shortage of soldiers is not so critical now, but it’s a reality that more and more highly educated urban children are not interested in serving in the army.”

China’s once-a-decade census, released this month, showed that 12 million babies were born in the past year, the lowest since 1961, during the Great Famine. The decision in 2016 to loosen China’s one-child policy and allow people to have a second child had failed to reverse the country’s falling birth rate.

The census showed China’s 2020 fertility rate was 1.3 children per woman – below the replacement level of 2.1 needed for a stable population.

Macau-based military expert Antony Wong Tong said that since 1993, many mainland military officials and observers had voiced concerns about the impact of the one-child policy – introduced in 1979 – on the military.

In an open report to the central government in 2012, Professor Liu Mingfu from the PLA National Defence University warned that at least 70% of PLA soldiers were from one-child families, and the figure rose to 80% among combat troops.

China soldiers Xi Jinping Beijing
People’s Liberation Army’s Honor Guard Battalion soldiers in front of photo of President Xi Jinping near Tiananmen Square in Beijing, May 20, 2020.

“We could find the PLA has recruited more female soldiers in the past decade – a popular approach adopted by developed countries facing a shortage of new blood,” Wong said.

Previous official figures showed women made up 5% of the PLA’s 2 million troops, but Zhou said the proportion had increased to 7%. Women made up 17% of the American military in 2018, according to the US government.

The PLA also set up its first female marine troop, which debuted in the 2017 Zhurihe war game parade.

Ni Lexiong, a military expert in Shanghai, said a greater proportion of women in the military would become a global trend thanks to the development of military technologies.

“Male-dominated troops is an outdated concept, and more highly educated soldiers are required, playing keyboards indoors,” Ni said.

“Modern warfare will focus on artificial intelligence, unmanned aircraft, electronic countermeasures and other confrontations that do not need too much physical strength, allowing more competent women to play a role in the armed forces.”

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Women are taking a ‘rain check’ on babies, and it could change the shape of the economy

millennialskids_ Alexi Rosenfeld
The number of births have been declining during the pandemic.

  • America is seeing a “baby bust” as women put off having kids during the pandemic.
  • The drop in births intensifies a pre-pandemic trend of decreasing birth rates and fertility rates.
  • It could slow down the economy in the long term, but it could also result in a delayed baby boom.
  • See more stories on Insider’s business page.

The predicted baby boom is looking more like a baby bust.

While many thought a year locked up would lead to some serious babymaking, Brookings Institute economists Melissa Kearney and Phillip Levine forecasted the opposite last June: The pandemic would lead to 300,000 to 500,000 fewer births in 2021, they said.

So far, their predictions are on track.

Nine months after the first lockdowns began in the US, the number of births in the country had declined by 7%, according to data provided to CBS News by health departments across more than 24 states. And fertility rates – the number of live births a woman is expected to have over her lifetime – are already lower in the first few months of 2021, said Christine Percheski, associate professor of sociology at Northwestern University.

“We’re going to see many fewer babies in 2021,” she told Insider.

The drop continues a pre-pandemic trend of declining birth rates and fertility rates, as childbearing women, many of whom are millennials, delay having children. Both of these rates decreased by 2% from 2017 to 2018, per the latest CDC data, with the birth rate hitting its lowest in 32 years. As of January 2020, the US fertility rate sat at 1.73 births per mother – a stark contrast from the peak in 1957 at 3.77 births per women.

Demographers have expressed concerns over what this means for the future of America, as the fertility rate is below the replacement rate – producing as many births each year as deaths – of 2.1 births per woman.

The decline in births over time is the result of both economic distress as well as progress for women in the workplace, with potential long-term implications, such as a smaller workforce and higher cost of caring for the aging. It’s too soon to say whether we should be concerned about these economic effects, but it’s already clear the economy is in for a big change based off what happens to the American birthrate.

Catching up to a global shift

American women are having babies later. While US birth rates have declined for nearly all age groups of women under 35, per latest CDC data, they rose for women in their late 30s and early 40s.

But this is actually bringing the US in line with worldwide trends – or helping it catch up, depending on your perspective. High-income countries, and increasingly middle-income ones, have long seen women delaying their first child until later ages compared to American women, Percheski said.

It’s a sign of better access to education and employment opportunities, a rise in individualism and women’s autonomy, better sex education, and a shift from religious-based to more secular values, she said. But on a more individual level, having kids at a later age is also a result of women choosing to stay in school longer, waiting until later to marry, and paying off student debt first.

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American women delaying childbearing is bringing the US in line with worldwide trends.

To be sure, macroeconomic forces are another major factor in the decision to postpone having kids. Millennials have grappled with several of these, from the lingering effects of the Great Recession to soaring living costs for things like housing and, of course, childcare.

Finances are one of the top reasons why American millennials aren’t having kids or are having fewer kids than they considered ideal, Insider’s Shana Lebowitz reported, citing a survey by The New York Times. To raise a child to age 18 in America, it’ll cost parents an average of $230,000.

A ‘rain check’ on babies

Recessions typically have the strongest economic influence on birth and fertility rates. “People tend to wait during periods of political and social and rest,” Percheski said.

The Great Recession saw a 9% decline in births, per Brookings, about 400,000 babies fewer than there would have been otherwise. And while the Spanish Flu only resulted in an economic contraction, that public health crisis also led to a drop in births. A pandemic lumps together economic and health turmoil, which Brookings says could result in a greater impact on births.

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Sara Adelman became a working-from-home mom during the pandemic. Birth rates typically decline during periods of economic crisis.

But whether the current lapse in babymaking will translate to fewer babies overall or just a childbirth postponement, Percheski said. She said she thinks we’ll see a reduction in the number of women having two or three kids, as happened during the financial crisis.

Mauro GuillĂ©n, Wharton professor and author of “2030: How Today’s Biggest Trends Will Collide and Reshape the Future” told Insider that the decline in births is a “temporary blip,” likely to last one to two years.

“Young couples have said, ‘Give me a rain check, I don’t want the baby now because there’s too much uncertainty,'” he said. “But they will have those babies later. They don’t cancel their plans to have babies for life.”

A ‘demographic time bomb?’

A decline in birth rates has sparked worries that the US may be headed for what’s known as a “demographic time bomb,” in which an aging population isn’t replaced by enough young workers.

This could slow the economy in the long term by creating higher government costs and a smaller workforce, who will have to front the care costs for aging populations. It could also create a shortage of pension and social security-type funds and impact things like school enrollment and college demand.

Japan is a famous example of just such a time bomb, long ticking demographically. Experts in that country are now worried that a pandemic-fueled baby bust could worsen the country’s aging crisis that strains the working population. Like Japan, Italy is facing an aging population and dropping fertility rates, to the point where the government has begun issuing fertility ads. So far, high levels of immigration have kept the US from seeing the same economic impact that has hit these other countries.

But Percheski said a decline in births isn’t necessarily bad – it will just require structural adjustments, like creating new public policies that respond to changes in population size.

family child tax credit mothers
Today’s baby bust could end up being tomorrow’s baby boom.

In some ways, fewer classmates for those born in 2021 could be good, she added.”If there are fewer people competing for jobs when they hit the job market, that’s not bad from their perspective, but it does require us to make adjustments.”

America can also change now to avoid having to do it later, such as making childcare more affordable. “Raising children is one of the great joys of life, but it’s also one of the great burdens,” economist Tyler Cowen said in a recent panel with the American Enterprise Institute. “If we don’t have innovations to make raising children either easier or more fun or less costly, we’re in big trouble.”

But if the pandemic-fueled birth decline just results in women bearing children at a later age rather than having fewer kids or none at all, per Brookings, the fertility rate may be underestimated. It could even result in a delayed baby boom.

Guillen said he thinks we’ll see a higher number of births in 2022 and 2023, which could make preschools fuller. He said he’s more concerned with the mortality rate than the birth rate, but in any case the full effects of the birth decline won’t truly be seen until 20 to 30 years later.

“Generally, it would be better to have a smoother evolution of pace, but recessions always have their effect,” he said.

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