Freedom, Not Fertility, Is The Key To A Thriving Economy

It is a profoundly personal decision that only parents can make based on their particular preferences and circumstances

By Paul Hsieh,

Is America’s declining fertility rate “the root cause of most of our problems”? This was the bold claim made recently by conservative writer Jonathan Last in the Wall Street Journal. Other conservative pundits have echoed this theme. New York Times columnist Ross Douthat recently pleaded for, “More Babies, Please” to maintain our economic growth. In the Weekly Standard, Joel Kotkin and Harry Siegel warned of “soaring entitlement costs and diminished economic vigor” if America remains a “low fertility society.” All of these conservatives have identified genuine economic challenges facing America. But if we wish America to thrive economically, the government’s job should be to protect freedom, not promote fertility.

There’s no doubt that fertility rates and population growth (or decline) can affect a country’s economy. As Megan McArdle notes, “economic growth equals the growth in the workforce plus the growth in productivity of that workforce.” And many industrialized countries with declining birthrates have also experienced economic stagnation as the population ages. Jonathan Last cited the example of Japan, where fewer people are getting married and having children. The average Japanese woman now has only 1.3 children over her lifetime (2.1 is considered the “replacement rate” necessary to maintain a stable population). As a result, Last argues, the Japanese economy has suffered.

Kotkin and Siegel also note that there will be fewer productive Japanese workers to pay for government retirement and health care benefits for their elderly. With an average fertility rate of 1.5, Western European countries are experiencing similar problems. The U.S. has a slightly higher fertility rate of 1.93, but still below the replacement rate of 2.1.

So what role, if any, should the U.S. government play in raising the national fertility rate? Douthat notes that “America has no family policy to speak of” as opposed to countries like Sweden and France. Kotkin and Siegel support reforming the U.S. tax code “to encourage marriage and children.” But it’s unclear that such direct policies will work. Last notes that the French fertility rate is still below 2.1 despite aggressive pro-childbirth programs such as state-run daycare.

More fundamentally, it’s not the government’s job to promote any particular lifestyle — e.g., single vs. married or childless vs. multiple child families. The government should not attempt to tilt the playing field to favor a specific “ideal” family size of 2.1+ children. Rather, the government’s job should be to protect the freedom of parents to have zero, one, two, or five children — provided the parents can properly nurture and care for them all. How many children to have is a profoundly personal decision that only parents themselves can make based on their particular preferences and circumstances.

Unfortunately, Douthat and company seem uncomfortable with fully respecting this freedom, which necessarily includes the freedom to remain childless. In a follow-up essay Douthat admits that, “on a case by case basis, these kinds of decisions can be defensible, admirable, necessary, wise.” But he also invokes a mystical “obligation for somebody to bring [future] generations into existence”. Such an obligation is asserted without proof. Many will be rightly alarmed at any hint of a supposed “obligation” to have children, let alone one that informs government policy.

But although the government should not promote any specific national fertility rate, it can take some positive steps to address the concerns of those warning of a “baby bust.”

First and most important, we can adopt free-market reforms that improve overall prosperity. Greater prosperity will allow prospective parents who wish to have kids but are hesitant due to tight economic circumstances. To the extent that limited governments and free markets have been partially tried, we’ve seen flowering of economic prosperity. The examples of South Korea vs. North Korea, West Germany vs. East Germany, and Hong Kong vs. Communist China are testimonies to the power of free markets.

Second, we can reform our immigration policies. Of course, the government should stop criminals, terrorists, and those with dangerous contagious diseases from coming to America. But honest immigrants wishing to come to America to work hard and better their lives should be free to do so. More open immigration would provide a much-needed injection of economic vigor into our economy. (Note: This does not imply granting immigrants US citizenship, which is a separate issue.)

Finally, we should privatize Social Security. Contrary to popular misconception, Social Security is not a savings plan where people deposit money earned while working to be withdrawn after retirement. Rather, it is a “pay as you go” system where current workers are taxed to pay current retirees. Declining fertility rates thus threaten the system.

Morally, individuals are legitimately entitled to retire with their own savings or from money contractually owed them by private pensions or other voluntary retirement plans. But they do not have the right to confiscate others’ earnings to fund their retirements. Privatizing Social Security won’t be politically easy, and a detailed discussion of how best to accomplish this is beyond the scope of this column. But once Social Security is transformed into a system of private accounts more like our current 401(k) plans, they won’t be affected by a nation’s collective birthrate.

As a matter of free speech, Douthat, Last, Kotkin, and Siegel all have the right to exhort Americans to have more babies, just as others have the right to disagree. But as a matter of public policy, the government should take a hands-off approach, and instead protect the rights of prospective parents to make these decisions for themselves. If we want a thriving economy for ourselves and for future generations, the government’s job is to protect our freedom, not to promote fertility.