No one ever had kids because the cost-benefit analysis looked good. (Maybe some immigrant brides) In the long run, kids do not make economic sens: in fact, in the long run nothing does. But in the long run, nothing makes as much non-economic sense as kids.
It’s literally only in the long run that kids make sense. But you have to factor in their lifetime and children’s lifetimes, etc. from a pure economic perspective, having children could produce the kind of gains only .001% of the population attain in a lifetime. Children also greatly reduce the risk of absolute destitution later in life.
Not to dissuade you from interesting quantitative research, but we are far more prosperous than ever, it's not lack of resources that prevents people from having kids. Who has the most children in Europe? Gypsies and immigrants - the poorest lot.
Most young people just do not envision themselves having children early, perhaps when they're 30, and then it's suddenly hard to find a partner or fertility problems kick in. Hedonistic individualism, feminism, overall value confusion.
Someone posted online the minutes of a meeting of the french government about legalizing the pill. De Gaulle and his ministers were aware that the pill would further suppress fertility but hoped that it will be counterbalanced with the help of family and housing spending while others pointed that no interventions are known to work.
The most important question facing our species and in 60 years we made no progress.
Fascinating essay. I think one possible answer might be tax breaks for employers to encourage flexibility towards working women. What seems to be happening is that globally women's employment negatively correlates with TFR, but flex tends to buffer or mitigate the trend.
I wonder whether it might be possible to assign countries policies a value for flex and then compare to TFR. Grok stated the following: In Italy/Poland (low flex), employed women have 0.2–0.3 fewer kids; generous leave narrows gap.
It's worth noting that some of the early evidence shows that educated/remote women see biggest fertility gains (+10–15% intentions).
I think you're right- broadly speaking government spending doesn't improve TFR, but there might be a specific exception for economic freedom and reforms which allow more choice and less economic necessity for women to work full-time.
I don't know how you would go about testing this hypothesis. There are few good databases but I'm sure whether they compile their data in a format which would be useful.
You could also look at Swiss data where women were de facto excluded from the workforce much later than the rest of Europe (until very recently) despite having an otherwise similar society and economy.
That's a great point and highly illuminating. Before full inclusion in the workforce Swiss women had higher TFRs. However, when they did rapidly enter the workforce, without many of the childcare provisions, leave entitlements, and flex arrangements enjoyed by women in other Western countries it led to decline in TFR below the average rate for Europe.
It does seem as though flex and other freedom to choose rights and provisions mitigate against birthrate population decline. Here's the thing- I'm very sceptical of government inserting itself into voluntary arrangements like contracts. This is why I generally tend to argue for slightly higher rates of corporation tax and employer taxes on employees, with a view to providing very generous tax incentives and rebates for approaches which expand choice and personal liberty. Ironically, the best policy in this suite is only tangentially related to liberty- capital expenditure programs enhance liberty by making everyone more prosperous over time. It's one of reasons why societies tend to become wealthier per capita during tight labour market conditions.
A problem with many of these spending programs is that whatever is left after government inefficiency and corruption goes to poor families, or those that are under some arbitrary income levels. We know what that means, stuff like locals having to pay for private childcare because public ones are full of immigrant kids. And parents being discouraged from being productive so they stay under that income threshold and keep getting benefits. So essentially locals don’t have kids in part because they have to subsidize other’s kids, and bureaucrats.
Tax breaks should work better, but if they mean percentage discounts, instead of absolute deductions. For example, 25% discount on your income tax for each child after the first one, so you pay 0 on your 5th child (you’d still pay some other kinds of taxes). I know you studied that in this article but I think we’d need to see what those deductions really mean. If they mean something like paying €500 less in taxes a year, that’s obviously not going to change anything for productive people, only for parasites.
Anyway, as a libertarian I don’t like any of those options, we should just get rid of most of what governments do and drastically reduce taxes, so that people have much more money and are encouraged to produce more as they’d keep most of it. That, among other things, means people could afford having more kids and spending more time with them.
I think a big factor why people have less kids now in the developed world is because family members rarely stay in the same place, they move to different places to study or work and don’t come back. If where you live you have many relatives, that means you can easily delegate raising the kid among people you trust. That creates like a network effect, the more family around, the more convenient it becomes to grow the family.
Somebody ... Lyman Stone? ... said that what counted is marrying earlier. Married people keep having kids until they are too old to do so. You can imagine how earlier married could drive the 15 years or more married statistic, but is that what the data shows?
The evidence that income/wealth (positively but weakly) cause fertility is fairly solid, but this might not translate to resource gains that come from the government.
Back in 1939 NZ changed taxation in a way that penalised families. At the time NZ's TFR was about 2.5 per woman. It caused a great deal of bitterness among voters who had kicked off a baby boom shortly before the Labour government was elected into power in 1935 (they initiated many social welfare policies that supported working class voters). This boom peaked in 1960 at 4.1 per women, 20 years after the tax penalty was emplaced. Curiously1960 was the year after the tax rules were returned to neutrality. Voters clearly didn't get the message as births dropped precipitously and persistently for the following 20 years. In 1980 NZ's TFR stabilised around 2.1 where it persisted until about 2010, since when it has persistently declined to its current 1.6 per women. God knows why, as family taxes haven't changed
"This boom peaked in 1960 at 4.1 per women, 20 years after the tax penalty was emplaced. Curiously1960 was the year after the tax rules were returned to neutrality."
Even more curiously, 1960 was when the first oral birth control pill was available to the public, at least in the United States.
In NZ, GP's could prescribe the Pill to married women from 1959. It became generally available to NZ women (via prescription) in 1970 (if I recall correctly).
I write my comment somewhat tongue in cheek. Tax breaks were clearly too insignificant in comparison to other social changes that occurred for their effect to be isolated.
Maybe you'll get an effect if instead of current benefits your pension would linearly depend on all taxes, tolls and social duties paid by your kids, grand-kids, grand-grand-kids etc...
I suspect that the real driving factor behind TFR in the West is something pretty nebulous like “stable optimism about the future”. Good luck getting data on that. All of these more visible measures are just trying to indirectly nudge that dial.
No one ever had kids because the cost-benefit analysis looked good. (Maybe some immigrant brides) In the long run, kids do not make economic sens: in fact, in the long run nothing does. But in the long run, nothing makes as much non-economic sense as kids.
It’s literally only in the long run that kids make sense. But you have to factor in their lifetime and children’s lifetimes, etc. from a pure economic perspective, having children could produce the kind of gains only .001% of the population attain in a lifetime. Children also greatly reduce the risk of absolute destitution later in life.
Not to dissuade you from interesting quantitative research, but we are far more prosperous than ever, it's not lack of resources that prevents people from having kids. Who has the most children in Europe? Gypsies and immigrants - the poorest lot.
IMO it's almost completely cultural
https://x.com/MoreBirths/status/1944066771050188894
Most young people just do not envision themselves having children early, perhaps when they're 30, and then it's suddenly hard to find a partner or fertility problems kick in. Hedonistic individualism, feminism, overall value confusion.
Someone posted online the minutes of a meeting of the french government about legalizing the pill. De Gaulle and his ministers were aware that the pill would further suppress fertility but hoped that it will be counterbalanced with the help of family and housing spending while others pointed that no interventions are known to work.
The most important question facing our species and in 60 years we made no progress.
“Only Israel has positive fertility” seems like a good thread to pull on.
The 'pill' turned sex into mostly recreation.
Fascinating essay. I think one possible answer might be tax breaks for employers to encourage flexibility towards working women. What seems to be happening is that globally women's employment negatively correlates with TFR, but flex tends to buffer or mitigate the trend.
I wonder whether it might be possible to assign countries policies a value for flex and then compare to TFR. Grok stated the following: In Italy/Poland (low flex), employed women have 0.2–0.3 fewer kids; generous leave narrows gap.
It's worth noting that some of the early evidence shows that educated/remote women see biggest fertility gains (+10–15% intentions).
I think you're right- broadly speaking government spending doesn't improve TFR, but there might be a specific exception for economic freedom and reforms which allow more choice and less economic necessity for women to work full-time.
I don't know how you would go about testing this hypothesis. There are few good databases but I'm sure whether they compile their data in a format which would be useful.
You could also look at Swiss data where women were de facto excluded from the workforce much later than the rest of Europe (until very recently) despite having an otherwise similar society and economy.
That's a great point and highly illuminating. Before full inclusion in the workforce Swiss women had higher TFRs. However, when they did rapidly enter the workforce, without many of the childcare provisions, leave entitlements, and flex arrangements enjoyed by women in other Western countries it led to decline in TFR below the average rate for Europe.
It does seem as though flex and other freedom to choose rights and provisions mitigate against birthrate population decline. Here's the thing- I'm very sceptical of government inserting itself into voluntary arrangements like contracts. This is why I generally tend to argue for slightly higher rates of corporation tax and employer taxes on employees, with a view to providing very generous tax incentives and rebates for approaches which expand choice and personal liberty. Ironically, the best policy in this suite is only tangentially related to liberty- capital expenditure programs enhance liberty by making everyone more prosperous over time. It's one of reasons why societies tend to become wealthier per capita during tight labour market conditions.
Very interesting - thank you!
A problem with many of these spending programs is that whatever is left after government inefficiency and corruption goes to poor families, or those that are under some arbitrary income levels. We know what that means, stuff like locals having to pay for private childcare because public ones are full of immigrant kids. And parents being discouraged from being productive so they stay under that income threshold and keep getting benefits. So essentially locals don’t have kids in part because they have to subsidize other’s kids, and bureaucrats.
Tax breaks should work better, but if they mean percentage discounts, instead of absolute deductions. For example, 25% discount on your income tax for each child after the first one, so you pay 0 on your 5th child (you’d still pay some other kinds of taxes). I know you studied that in this article but I think we’d need to see what those deductions really mean. If they mean something like paying €500 less in taxes a year, that’s obviously not going to change anything for productive people, only for parasites.
Anyway, as a libertarian I don’t like any of those options, we should just get rid of most of what governments do and drastically reduce taxes, so that people have much more money and are encouraged to produce more as they’d keep most of it. That, among other things, means people could afford having more kids and spending more time with them.
I think a big factor why people have less kids now in the developed world is because family members rarely stay in the same place, they move to different places to study or work and don’t come back. If where you live you have many relatives, that means you can easily delegate raising the kid among people you trust. That creates like a network effect, the more family around, the more convenient it becomes to grow the family.
In Japanese data until 2010, the data showed two factors get couples to 2.1 Tfr:
1) length of first marriage over 15 years
2) living anywhere but a major city (In Japan, cities under 1 million)
Somebody ... Lyman Stone? ... said that what counted is marrying earlier. Married people keep having kids until they are too old to do so. You can imagine how earlier married could drive the 15 years or more married statistic, but is that what the data shows?
The evidence that income/wealth (positively but weakly) cause fertility is fairly solid, but this might not translate to resource gains that come from the government.
Re tax breaks for families:
Back in 1939 NZ changed taxation in a way that penalised families. At the time NZ's TFR was about 2.5 per woman. It caused a great deal of bitterness among voters who had kicked off a baby boom shortly before the Labour government was elected into power in 1935 (they initiated many social welfare policies that supported working class voters). This boom peaked in 1960 at 4.1 per women, 20 years after the tax penalty was emplaced. Curiously1960 was the year after the tax rules were returned to neutrality. Voters clearly didn't get the message as births dropped precipitously and persistently for the following 20 years. In 1980 NZ's TFR stabilised around 2.1 where it persisted until about 2010, since when it has persistently declined to its current 1.6 per women. God knows why, as family taxes haven't changed
"This boom peaked in 1960 at 4.1 per women, 20 years after the tax penalty was emplaced. Curiously1960 was the year after the tax rules were returned to neutrality."
Even more curiously, 1960 was when the first oral birth control pill was available to the public, at least in the United States.
In NZ, GP's could prescribe the Pill to married women from 1959. It became generally available to NZ women (via prescription) in 1970 (if I recall correctly).
I write my comment somewhat tongue in cheek. Tax breaks were clearly too insignificant in comparison to other social changes that occurred for their effect to be isolated.
Maybe you'll get an effect if instead of current benefits your pension would linearly depend on all taxes, tolls and social duties paid by your kids, grand-kids, grand-grand-kids etc...
"Fertility rates are terrible in every good country except for Israel."
Are you implying Israel is a good country? Define 'good country'.
Hungary was doing well until the government, like a lot of governments at the time, bullied people into taking a fertility-damaging medication.
Really great analysis work.
I suspect that the real driving factor behind TFR in the West is something pretty nebulous like “stable optimism about the future”. Good luck getting data on that. All of these more visible measures are just trying to indirectly nudge that dial.