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The Empty Cradle

How Falling Birthrates Threaten World Prosperity (And What To Do About It)
Published:   April 2004
ISBN: 0465050506 | 256 pages
A must read for all who care about their own and our nation's financial future.

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Selected reviews of The Empty Cradle are featured below:

The Dallas Morning News

Sunday, August 22, 2004
"We're not facing a nuclear war or a population bomb, we're facing a depopulation bomb. This isn't just Europe. It's the entire world." That was one of the first things Phillip Longman said when I called to talk about his book, The Empty Cradle: How Falling Birthrates Threaten World Prosperity (And What to Do About It) (Basic Books, $26).

I called him because he is one of the few economics writers whose vision includes families as something more than consuming units. He clearly recognizes that families are powerful economic institutions in their own right. Without families -- and all they do to create and prepare the next generation -- our market economy and public service economy would collapse.

If the idea of falling population strikes you as odd, you need to update your picture of the world and the problems it faces. Less than 50 years ago (1957, the year Lyle Lovett was born, to be precise), the U.S. birthrate hit a record and began to decline. From 3.7 births per woman -- well over the 2.1 required to maintain a level population -- our birthrate has been falling since. It is now hovering just below replacement rate.

A Global Concern
In Europe, birthrates are even lower. As a consequence, by 2050 the population of Europe will have fallen to what it was in 1950. Mr. Longman says this is happening all around the world: Women are having fewer children. It's happening in Brazil, it's happening in China, India and Japan. It's even happening in the Middle East. Wherever there is rapid urbanization, education for women and visions of urban affluence, birthrates are falling.

"One of the reasons is that human beings have created an environment that is negative for childbirth. There is a demand for human capital, but there is almost no reward for it. So people have fewer children.

"On a farm, you can have children and they will be useful from age 5. But in an urban environment, children are liabilities. And 50 percent of all the people in the world live in urban environments.

"People who are involved in raising the next generation are typically paid far less than they would make doing something else. You can earn more, for instance, teaching real estate than being a schoolteacher."

Questionable Benefits
"Why does this happen? Think about it like this. When you go to a casino, you keep all the winnings. But when you have a child, you have to share the benefits of your investment with the entire society.

"So we have a 'free rider' problem. You don't need to have children to provide for your old age -- but the pension systems need them." (He was referring to the coming Social Security crunch as the number of retired people rises faster than the number of workers.)

I asked whether the problem was that people were more self-centered. "This isn't about selfishness. Surveys show women haven't had as many children as they wanted to have. "The average woman in Europe, for instance, wanted to have 2.1 children but only had 1.3. In the United States, the average woman wanted 2.3 children [enough for population growth], but only had 2.02.

Bad Timing
"People, particularly in Europe, aren't producing as many children as they would like to have. The economy is asking them to do more and more in their best reproductive years. They're expected to get educated, get a job, find a nice neighborhood, etc. By the time they do that, they've missed their best years for reproduction. Basically, our societies have put a tax on nurture. Parents create value, but they get little of it."

I asked how the nurture tax could be measured.

"Parents are effectively taxed in several ways. They pay the same Social Security taxes as others. But at the same time, they produce the children that will secure the future of Social Security. And children are an enormous investment. The government estimates it's about $200,000 in direct expenses. "There's also an enormous opportunity cost -- the forgone wages. Even if the wife doesn't stay home full time, the part-time work is an opportunity cost."

The Empty Cradle captures a lost truth: There's more to life than investments. And there's more to investments than money. -- By Scott Burns

More Praise for The Empty Cradle

"Forget the population bomb. The rich countries, and possibly the entire world, will soon be grappling with a new problem: population aging and population decline. In The Empty Cradle, Phillip Longman offers a wealth of insight into what is arguably the biggest -- and least appreciated -- challenge of our time."
Richard Jackson, Program Director & Senior Fellow, Global Aging Initiative Center For Strategic and International Studies

"A must read for all who care about their own and our nation's financial future. It shows conclusively that the strength of America's financial institutions ultimately depends on the strength and fertility of American families."
Peter G. Peterson, Chairman, Federal Reserve Bank of New York and Author of Gray Dawn

"Phillip Longman is one of America's most penetrating policy journalists, and The Empty Cradle is his tour de force. This elegant, concise book will change the way you look at demographics, family life, and the economic future of the world."
Paul Glastris, Editor-In-Chief, The Washington Monthly

"Most everything our society will become during the twenty-first century is incubating in our families today. In this important new book, Phillip Longman explains why family policy will soon loom large in every serious debate over America's demographic and economic future."
Neil Howe, Senior Advisor, Concord Coalition and Author of Generations