Demography is not Destiny

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 -- 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 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 scope of government to ameliorate.

One way to do this would be to give parents relief from punishing and unprecedented payroll taxes. Other ways would be to make access to health care less contingent on full-time work, to encourage greater age diversity in university admissions, and to provide more resources for childcare. Within Europe today, the highest fertility rates are found in the nations that do the most to ease the strains between work and family life.

Are fears of population decline overblown? The matter cannot be settled by pointing to history, because no previous society has experienced population aging on the scale and at the speed of that now occurring throughout the world. Demographic change once moved at a tectonic pace. But countries such as China are now aging as much in one generation as countries such as France did over the course of centuries. And even in healthy, peaceful populations, fertility rates are falling well below replacement levels and staying there -- a trend that, again, has no historical precedent.

How certain is the global aging trend? One can be quite sure how many elders there will be over the course of the next 70 to 80 years because those people have already been born. And without some new totalitarian or fundamentalist force commanding procreation, the global decline in fertility rates is unlikely to reverse itself.

As I stated in my article, lower fertility does seem to bring some economic benefits when it begins. And as I discuss in greater detail in my book, The Empty Cradle, there are many ways in which societies can encourage more productivity and more productive aging. But a society that consistently consumes more human capital than it produces obviously must prepare for new and difficult challenges.