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The potential impact of falling fertility rates on the economy and culture
Lois M. Collins
Fertility rates are important for economic growth, cultural stability and more. The question is when they become problematic, and experts don't always agree on that. - photo by Shutterstock

Much of the world — especially most developed countries — have fallen below the "replacement" fertility rate, but whether this is cause for celebration or concern is the subject of debate.
Fertility rates, whether high or low, impact economic growth, cultural stability and more. The question is at what stage of either decline or growth they become problematic — and experts don't always agree.
The total fertility rate — the number of babies women average over the course of their lives — can be expressed for local, state, regional, even global populations. America's total fertility rate is around 1.9 babies per woman, a historic low but near the replacement rate of 2.1. Women need to average two babies for the population size to be stable. If the current rate dropped and immigration to the United States stopped, the country would experience population decline.
Some parts of the world are far below 2.1 and may see steep population declines in the future, demographers warn, including China, Japan, Germany, Ukraine and others. The range worldwide is large, according to the CIA World Fact Book: from Niger's 6.89 down to Singapore's 0.8, based on 2014 estimates. At both ends, there are potential benefits and worries.
"We don't take a stance one way or the other on whether it's good or bad," said Mark Mather, demographer with the Population Reference Bureau. Small year-to-year changes like those experienced by the United States don't make much difference, he noted. But a sharp or sustained drop over a decade or more "will certainly have long-term consequences for society," he said.
Best guesses
What will happen in 50 or 100 years is speculative, the math complicated, said Philip N. Cohen, professor of sociology at University of Maryland. Very low fertility rates could lead to population declines, which could be bad for the economy.
But what concerns most people is not the rate itself, but changes in the rate and how dramatic they are. Low fertility itself is not as bad as falling fertility can be. When fertility falls, a generation is smaller than the one that came before and struggles to support retirees. Still, if that new rate holds, the population can stabilize over time. "It's the change that creates the shock. That's what concerns people," Cohen said.
Gradually declining population sizes might be ideal for the environment and stability, he noted. Gradually growing populations, on the other hand, might also be good if they generate dynamism and economic growth.
Rapid contraction of the labor force could have a negative impact on an economy, on growth, consumption and on the ability of current generations to pay for entitlements for older Americans, said Brad Wilcox, director of the National Marriage Project.
It's a concern in real time for countries like Europe and East Asia, now experiencing quite low fertility rates, he said. They may soon see their labor forces shrink. At risk is the ability to maintain their economies, pay pensions, handle health care demands and more. But fertility is one factor among many, he noted, including the importance of education and whether the infrastructure is healthy.
Whether a particular fertility rate is a demographic dividend or deficit changes. A generation of children becomes a generation of workers and parents and then a generation of retirees. Its size relative to the other generations in life's pipeline matters.
Germany has been strong economically, Wilcox said. On its current course, however, it will face major problems as a large workforce moves into retirement. That's an issue cropping up in many countries.
Too many people?
In the late 1960s, Stanford University professor Paul R. Ehrlich's book, "The Population Bomb," was published, reflecting growing concerns over the planet's ability to sustain a "population explosion."
The growth at that time came not from more births, but from people figuring out how to increase life expectancy by saving children from preventable deaths, Cohen said. Any period of change when things are out of balance between generations can lead to problems or worries about problems.
There are various ways to think about what a fertility rate means, he said, such as the immediate impacts of how many children a family has. With fewer children, parents put more resources into each one, he said. "The price of raising a child goes up, but the benefits also go up. The hope is the increase in children's fortunes makes up for the greater expense and they do better in school, in college, are more productive economically."
A downside of lower fertility is that there will be fewer workers 40 years later to support the retirees and social programs of that day. "But maybe, with greater investment, they will be more brilliant, more productive and able to make up for the fact that there are fewer," he said.
Some people say when the population gets smaller, society becomes less dynamic and competitive. Cohen's not convinced. "There is not a historic record of evidence to show the consequences are that serious compared to the benefit."
Global or local
What fertility rates mean often plays out on a very local basis. Many parts of America are growing rapidly. But parts of the Midwest and Appalachia are losing population quickly.
An area can suffer a declining tax base, Mather said. Without enough people to feed the economy, there's lower demand for services and goods and a declining housing market.
Schools close because there aren't enough students in a neighborhood, or new ones must be built to meet fertility's demand. What do locals do with their changed numbers? Does having fewer children mean smaller class sizes and more investment per child? Or are classrooms slashed, classes kept large?
Whether a town has too few or too many workers may prompt people to move in or out of it to find opportunity.
For planning, fertility rates matter. That's why every level of government has demographers, Cohen said.
Policy planners and officials look at fertility rates and population ages because they tell them how to prepare: how many schools they are going to need, the workforce available, pressures on the environment and transportation, what needs to be built out. That's how societies know what kind of retired population to plan for and what social programs could be needed, said Kristin Moore, senior scholar at Child Trends.
No one complains, she said, about the substantial drop in the teen fertility rate. But a similar decline in the fertility rate for well-educated couples in their 30s might mean a reduction in the highly trained workforce.
One of the most regular U.S. discussions, Mather said, is about the future. Baby boomers, the largest generation, are retiring or can see it in their headlights. Are there enough members of subsequent generations to support them as they receive benefits rather than wages? Who will buy the houses they try to sell as they get old? Will there be enough caregivers?
A fair bit of economic growth comes just from population growth, said David Sims, economics associate professor at BYU. He said some experts believe the growth in the labor force that results from a larger population spurs innovation. More people can produce more. They can have a wider range of specialties, and a bigger pool of thinkers may increase odds of "people with spectacular ideas and spectacular and rare talents."
What history doesn't showcase is stable populations when there is low fertility, he said. "With low fertility, historically, bad things had happened."
It's a chicken-and-egg question. Before modern chemical contraception, it took "some really bad shock to get to the point of population decline." Did population decline cause problems — or was it a symptom of problems? "It's hard to say," he noted.
Immigration is one way countries counter sagging fertility rates. Immigrants tend to be young, and the babies they have bolster populations. That's kept the American population growing for 20 years, said Mather.
Most of Europe now has fertility rates below replacement level, Sims said. Country sizes will either decline or they will attract immigrants. He suspects it will be the latter. But immigrants change the country. "We are kind of used to that. But it does tend to create more social stress and unrest in places like France or the United Kingdom when they have, say, a Turkish influx. You see a lot of potential for loss of social cohesion and the difficulty of continuing previous economic policies if you get to the point where you increasingly rely on immigrants who are culturally different."
When economies are poor, it's harder to attract immigrants. Policies cycle, too. There's more pressure to allow immigrants in when societies are contracting. Sometimes, there's also pushback.
What's ahead for America?
"I'm not worried," Mather said. "My one concern is we do see growing inequality. Those with college degrees are the ones that can afford to have kids. Folks who aren't high school grads or who just have a high school diploma are having kids outside of marriage. There's inequality and potential for kids to be growing up in unstable families."
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