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The Coming Baby Bust

Are industrialized societies prepared to deal with the potential economic and social ramifications of declining birth rates?

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Are industrialized societies prepared to deal with the potential economic and social ramifications of declining birth rates?

Way back in February (it almost seems like forever ago now) when the world was only beginning to find itself in the grip of the early stages of the COVID-19 pandemic, economists were predicting that extended periods of being home due to work and business shutdowns would lead to a baby boom. Hey, after all, with little else to do, it only makes perfect sense that couples would use this downtime to get busier in the sheets than perhaps they’d previously been in their already hectic lives, doesn’t it?

These projections for a spike in pregnancies didn’t happen. On the contrary, global birth rates (already steadily on the decline in industrialized and even some developing nations) continued their downward spiral.

Most unstable period in modern history

You would be hard-pressed to disagree that our world is in the most precarious, unstable state it’s been in living memory – some would say since the 1930s. Many young and younger middle-aged adults in western nations still find themselves struggling from the 2008 financial crisis. For many, the middle- class dream featuring a steady paycheque and a nice home in the suburbs that was almost a given until a couple of decades ago is out of reach for many people in their 20s and 30s, who, unlike previous generations, have had to wait much longer and accumulate more debt to attain them.

In fact, while many members of the Millennial Generation (who are in their prime childbearing years) were already putting off having children due primarily to reasons such as job instability, debt and the high cost of raising children, the pandemic served as a double whammy which – for older members of this generation – may mean not having kids at all.

Half a million fewer babies

Furthermore, according to a study done by the Brookings Institute in July, the U.S. could see as many as half a million fewer births in 2021 due largely to the pandemic, a phenomenon that could have negative effects on the country’s labor market.

It’s no secret that bringing another life into the world comes with a substantial price tag, an estimated $233,610, making having a baby a very careful decision for many couples. Compared to their parents and grandparents, young couples today are forced to do more juggling, whether it’s working multiple jobs, taking care of aging parents, or working while getting their higher education or – even more taxing, doing all this while raising young children on incomes that have remained stagnant for decades.

Childfree lifestyle on the rise

So then, it should come as no surprise that an increasing number of people are choosing to be childfree by choice. With so much to think about in this modern world, many couples (as well as those who are single) do not feel they have the time, money nor energy to devote to raising children.

The economic effect

The lingering question remains with regards to how falling birth rates will impact the economies of industrialized nations.

With so few babies being born, yet with significant aging populations, who will pay the taxes for social programs such as healthcare and pensions? Many economists and politicians, alarmed by this trend, have favored increasing immigration to offset falling fertility rates and address labor shortages, a move which only serves as a temporary measure as most countries have shrinking populations.

While some countries, namely Sweden, have had success at reversing falling birthrates by offering more generous social supports, most have not been able to put much of a dent in this burgeoning trend.

New social change

As societies have fewer children, it is inevitable that they will experience massive social change. On the other hand, life expectancy around the globe is rising, meaning we will live longer and spend more time working and contributing to the tax base.

Also, it is imperative to take into consideration that the need for large families which existed a century or two ago due to labor demands and high infant mortality rates does not exist today, as many jobs have and will continue to become the domain of automation and artificial intelligence in the future.

References:

Williams, Claire. “Millennials Were Already Putting Off Having Children. Then the Pandemic Hit.” Morning Consult, 30 Sept. 2020, morningconsult.com/2020/09/28/millennials-economy-children-poll/.

Gallagher, James. “Fertility Rate: ‘Jaw-Dropping’ Global Crash in Children Being Born.” BBC News, BBC, 14 July 2020, www.bbc.com/news/health-53409521.

Kearney, Melissa S., and Phillip B. Levine. “Half a Million Fewer Children? The Coming COVID Baby Bust.” Brookings, Brookings, 31 July 2020, www.brookings.edu/research/half-a-million-fewer-children-the-coming-covid-baby-bust/.

Bauer, Elizabeth. “Is Sweden Our Fertility-Boosting Role Model?” Forbes, Forbes Magazine, 9 Aug. 2019, www.forbes.com/sites/ebauer/2019/08/09/is-sweden-our-fertility-boosting-role-model/?sh=6478148813cb.

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