NCPA - National Center for Policy Analysis

How the Great Recession Has Jeopardized Our Demographic Health

August 28, 2012

The 2010 U.S. Census showed that the birthrate has slipped. This is in great part due to the poor state of the economy. Indeed, data show that the decline in birthrates coincided with the Great Recession, says Joel Kotkin, distinguished Presidential Fellow in Urban Futures at Chapman University.

  • The U.S. fertility rate dropped from 2.1 births per woman in 2007 to 1.9 last year.
  • The 2010 Census found that the number of households with children age 18 or under was 38 million, unchanged from 2000, despite a 9.7 percent growth in U.S. population.

Globally, the impacts of a low birthrate are already showing.

  • Census projections note that by 2050 there will be 40 percent fewer workers in Japan than there were in 2000.
  • Over that same time period, there is projected to be a 25 percent decrease in the number of workers in Europe.
  • As a result, Japanese lawmakers have voted to double the country's sales tax by 2015.
  • For the same reason, Germany is considering a new 1 percent income tax on younger workers.
  • Billionaire philanthropist Pete Peterson estimates that developed countries will need to increase spending on benefits for the old from 9 percent to 16 percent of the gross domestic product as a result of fewer young people to support an older population.

There are several factors that contribute to this decline, including the poor economic outlook. The pessimism about the economy forces people to conclude that having children is not the best idea. Other issues may include the increase in population density, the growing role of women in the workforce, or declining religiosity among society.

The implications of a decreasing population are significant. Without a demographic to replace an aging workforce, there will be no way to fill necessary jobs in the economy. Furthermore, with fewer people working, there is no way of providing funding for entitlement programs if the retired can't rely on the work of a younger generation.

Source: Joel Kotkin, "America's Baby Bust: How the Great Recession Has Jeopardized Our Demographic Health," Forbes, August 21, 2012.


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