Making Children Cheaper
Millennials Priced Out of Procreation

Many people in their prime parenting years aren’t having babies, not because they’re happily “child-free,” but because they think they can’t afford it. WaPo ran a long piece yesterday detailing how financial stress is driving the country’s low fertility rates:

Last year, the nation’s fertility rate hit a historic low — 62.9 births per 1,000 women ages 15 to 44, according to the Centers for Disease Control and Prevention. Some of that decline comes from a long-term shift toward smaller families. But finances also play a pivotal role. A Gallup poll last year found the main reason Americans were delaying parenthood was worries about money and the economy — even as the stock market rallied and broad indicators pointed to a brighter future, highlighting a disconnect felt by many Americans. A report by Pew Research Center showed birth rates in many states rise and fall in tune with personal income.

This isn’t all that surprising, but it’s worth noting as a gentle rebuke to those who overemphasize the cultural reasons the birth rate is tanking (extended adolescence, for one). There are two ways policymakers can help those who aspire to parenthood: one is to increase cash transfers or tax credits to parents; the other is to lower the overall costs of childrearing by making education, daycare, health services, and other routine expenses parents incur for their children less costly.

We’ve discussed before some of the mechanisms driving up costs in all these areas; each area looks different, and policies that make health care more affordable will differ from those that make education more affordable. But in all these cases remnants of the blue model—like ham-fisted federal mandates and regulations and guild-like behavior—conspire to make it more expensive to raise a child. Looking more closely at how to dismantle those barriers is a good starting point for wonks worried about low birth rates.

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  • It would be nice to see a chart or graph that shows 1) some typical, actual annual costs of raising a child, over time, since say 1916, and 2) the value of the tax deduction for a child, over the same time.

    • ShadrachSmith

      The cost for raising children for the vast majority of parents is always the same: everything you have.

  • Loader2000

    Most people are also under the impression that they have to be able to pay for their child’s entire college tuition, give them their own room, and all kinds of other stuff that is not really necessary. Child support is, however, expensive and in households where both parents have to work, it can be a problem.

    • Corlyss

      How about those “starter” homes that by any account are mansions compared to what you parents and grandparents started married life in???

      • Loader2000


  • Boritz

    The southern border is our procreation.

    • Corlyss

      Geez, I hope not. Bring us those ambitious and educated Asians and Indians!!!!!! I don’t want no illiterate welfare dependents who will always be lowest income earners like “the poor babies” now fleeing “violence and poverty” in central America, as if violence and poverty were new factors in immigration to the US. The latter’s kids might make something of themselves, but not these future slum-dwelling no-accounts. Economist had a lengthy article on the reasons the US economy is draggin’ arse and three of the reasons are 1) the explosion of disability claims that will take recipients out of the workforce forever; 2) other generous welfare transfer payments that make work unattractive; and 3) the exodus of Boomers onto the welfare (SSA) rolls.

  • Andrew Allison

    There’s a third way to help — stop strangling the economy with ever-increasing taxes and regulation, thereby increasing their incomes. I, for one, don’t want to pay even more tax to bribe millennials into having kids! Bad enough that the taxpayer is picking up 80% of the health insurance premiums for ACA participants.

    • LivingRock

      I agree with your third way. But it’s been interesting to me that there’s this sudden outrage (especially from the Boomer cohort) over paying for “other people’s healthcare” with the ACA when Medicare/Medicaid has been around for a while now. I don’t mean to assume your feelings about the issue, Mr. Allison, but imho it’s a sign of backwards priorities when Boomer folks are hissed about the Medicare “that they paid for” (which isn’t really true) coming under budget scrutiny while they simultaneously loathe ACA tax expenses. Not a fan of the ACA, but I’d much rather pay taxes to help young families with healthcare than to support what’s become a ponzi scheme and budget buster in Social Security and Medicare.

      • Andrew Allison

        No question that Social Security and Medicare as currently constituted are paying far more in benefits than the recipients contributed, and are unsustainable. Medicaid is even worse in the sense that recipients contribute nothing (and is self-destructing as more and more people have access to fewer and fewer providers because government can’t afford to pay them what their services are worth — a problem which ACA has exacerbated). However, we the taxpayers already provide very significant support for child-raising. I think we should be making the millennials more productive, not trying to bribe them to have kids.

        • FriendlyGoat

          They’ll be more productive when they have jobs, and they’ll have more jobs when we stop passing tax cuts which encourage employers to cut jobs.

    • FriendlyGoat

      The reason we should be paying more tax is not to bribe the millennials but for the purpose of job creation. Oh, but “low taxation” is the driver of jobs, they say. I happen to believe that this oft-repeated maxim we all supposedly “know” actually works to the exact opposite effect in the real world and our younger generations are paying a horrible price in joblessness for all our tax cutting.

      What kind of nutty tax code allows Microsoft to have $84,000,000,000 in cash and announce the biggest layoff in its history?

  • Corlyss

    “There are two ways policymakers can help those who aspire to parenthood: one is to increase cash transfers or tax credits to parents; the other is to lower the overall costs of childrearing by making education, daycare, health services, and other routine expenses parents incur for their children less costly.”

    What the heck is the matter with you folks here at VM? Have you gone suddenly touchy-feely “I want to buy the world a home and furnish it with love” on us as a policy solution??? Quick! Grab the Milton Friedman smelling salts!!!!! Is more and more transfer payments the only answer the under 40 crowd can think of???? We need jettisoning of much of the modern administrative state apparatuses for creating equality of outcomes at the expense of everyone’s opportunities!!!!

  • Curious Mayhem

    It’s not complicated. The First World has simply created a cost structure for leading a middle class life so restrictive and expensive, that procreation isn’t worth it. Ergo, vanishing Japan, Europe, etc.

  • Duperray

    The US Economy Faith (or religion) is as follows: ” I want to be rich, even more rich, even by legal robbery or government lobby”. This is the reign of selfish.
    Result is that more and more economic wealth is in a smaller and smaller number of persons.
    US is rich, but for only 100,000 persons; while all other perceive a declining wealth.
    But a country which is no longer able to provide family parenthood accepatble economic burden is engaged into a definitive decline: Void will be filled in with immigration and within two generations, original WASP are gone.

  • Anthony

    “It is perhaps inevitable that contraception and population growth are controversial topics, given the many perspectives thought to bear on them. Reproductive health activists focus on family planning and a woman’s right to control her own body. Economists look at the impact on sustainable growth. Governments fret about over-production and unemployment. Health workers worry about sexually transmitted diseases and malnutrition. Striking the right balance among these different viewpoints is no easy task – but much depends on getting it right.” Millennials, low birth rates, and Feed shortie by inference bring to mind “dependency ratios” (potential effects of changes in population age structures for social and economic development). Looking more closely may reveal more than blue model context for wonks.

  • Anthony

    Observation: sometimes we read for confirmatory bias (looking to affirm in millennial issue our own predilections). Secondarily, it is much easier to understand the distinction between possession or knowledge of an idea rather than believing or endorsing it.

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