US Birthrate At 30-Year Low, Fertility Rate At Record Low
1. US Birthrate Falls to 30-Year Low in 2017
2. Is the Drop in Fertility a Temporary Phenomenon?
3. Birthrates Decline For Almost All American Age Groups
4. Conclusions & Solutions – No Easy Way Out
The government reported earlier this month that the US birthrate fell to the lowest level since 1987 last year, despite an increase in the number of child-bearing age women in the population since then. The government also reported that the “fertility rate” – the number of births per 1,000 women – fell to the lowest level in almost a century in 2017.
This might seem like an odd topic to write about in an investment/economic E-Letter, but there are important implications for the economy, the workplace and the financial markets should these trends continue. For that reason, I would like all of my clients and readers to understand these implications and how they might affect our lives, our standard of living and maybe even our investments in the future.
US Birthrate Falls to 30-Year Low in 2017
American women are having children at the lowest rate on record, with the number of babies born in the US last year dropping to a 30-year low, according to a new government report released earlier this month.
Only 3.85 million babies were born last year, down 2% from 2016 and the lowest number in three decades, according to the US Centers for Disease Control (CDC).
The overall fertility rate for women age 15 to 44 was 60.2 births per 1,000 women – the lowest rate since the government began tracking it almost a century ago, according to the CDC.
Put differently, the total fertility rate among women of child-bearing age (15-44) fell to only 1.76 births per woman in 2017, the lowest level since 1978.
The “replacement rate” – the number of births per women of child-bearing age – to keep the population steady is 2.1 births.
The figures suggest that a large number of women who put off having babies after the 2007-09 recession are forgoing them altogether. It is estimated that 4.8 million fewer babies were born after the recession than would have been born had fertility rates stayed at pre-recession levels.
This decline in the birth rate will exacerbate the problems of America’s aging population. Many Baby Boomers are in or near retirement, leaving a smaller share of younger workers to pay into Social Security and Medicare. That is creating a funding imbalance that will strain the social safety net that supports the elderly.
While pundits continue to debate the causes of the long-term drop in fertility – which include economic worries among Millennials, lifestyle preferences for increasingly well-educated young women and a downward trend in Hispanic family size – the implications for social safety net programs that rely on younger workers funding benefits for older citizens are significant.