Investment Office Logo
Birth Rate Needed to Maintain Current Population

Next: A Nation of Singles – Implications For the Future

Overview

  1. US Birth Rate Falls to Record Low in 2011
  2. Birth Rate Needed to Maintain Current Population
  3. A Nation of Singles – Implications For the Future
  4. How Did We Become a Nation of Singles?
  5. Conclusions – How Do We Turn the Trend Around?

Birth Rate Needed to Maintain Current Population

As noted above, the US birth rate has been declining slowly over the last several decades. Today, the US fertility rate needed to maintain the current US population is 2.1 children per woman during her lifetime. Yet it now stands at only 1.9 and is falling, so we’re going backward.

The question is, why is the fertility rate falling faster in recent years, especially among immigrant women? As noted above, experts often point to the recession and financial crisis which unfolded in late 2007. The current falling fertility rate mirrors to some extent what has happened during other recessions. But in past recessions, the birth rate increased again once the economy recovered. So why is it not happening this time?

There are numerous possible answers. Let’s start with the plunge in birth rates among immigrants. Almost half of all immigrants to the United States are of Hispanic origin. But in recent years, immigration from Mexico, the biggest contributing country for many years, has dried up. For the first time since the Great Depression, the net migration from Mexico to the US has been zero.

Latino immigrants who have been here longer tend to adopt US attitudes and behavior, including having smaller families. Most experts agree that the decline in the birth rate among Mexican immigrants is probably so sharp because the rate was so high that there was more room for it to fall.

The birth rate decline among Latino women in recent years may also be related to enhanced access to birth control, emergency contraception alternatives and better sex education in schools, according to Kimberly Inez McGuire, a senior policy analyst at the National Latina Institute for Reproductive Health.

Fertility rates play a role, too. Nearly one in five American women now forgo having children altogether and, without babies, many consider marriage to be less of a necessity. People’s attitudes have followed the fertility rate. The Pew Research Center frequently surveys Americans about their thoughts on what makes a successful marriage. Between the 1990 survey and the 2007 survey, there were big increases in the percentages of people who said that sharing political or religious beliefs was “important to a good marriage.”

In 2007, there was a 21% increase in people who said it was important for a marriage that the couple have “good housing.” Thirty-seven percent fewer people said that having children was important. The other indicator to decline in importance from 1990 to 2007 was faithfulness.

In Europe, Asia, and most advanced countries, people are running away from marriage, children, and family life at an amazing rate. For example, 30% of German women today say that they do not intend to have children. In Japan in 1960, 20% of women between 25 and 29 had never married; today the number is more than 60%. It is estimated that up to 25% of all East Asian women will remain single up to age 50, and up to a third will remain childless.

Whatever the reasons, the US birth rate has fallen below the level needed to keep our population steady, much less growing. This pattern is likely to continue lower, especially as immigrants adopt US cultural norms of fewer children and smaller families. This will have growing implications for the economy and the investment markets.

Are we on the path to become Japan and Europe with even more aged populations? Demographers far and wide say yes. I first alerted my readers to this trend in 2007 when I reprinted a chilling article entitled “It’s the Demography Stupid.” It is even more chilling now!

Next: A Nation of Singles – Implications For the Future