The Hindu Business Line : Social factors driving US fertility rates

The US housing crisis may throw up an unexpected consequence – a decline in fertility rates in a country that boasts of the highest fertility levels in the developed world. A recent paper titled ‘The Future of American Fertility’ by Samuel H. Preston and Caroline Sten Hartnett (NBER Working Paper 14498) points out that the “median price of owner-occupied houses in an area has a significant positive coefficient (on fertility)”.

Simply put, a larger house is an incentive to raise a larger family. With a number of households in the US losing possession of houses they aspired to own, fertility rates could dip as well. If the recession is a prolonged and serious affair, undermining employment, wealth, and with it the confidence to raise a family, it could create problems for the pension sector.

Factors

The paper explores the factors behind the relatively high fertility rates in the US in relation to the rest of the developed world. Its findings are particularly relevant to the urban, professional class in India. The paper looks at how the working woman in the US has done well to combine her income-earning aspirations with childbirth and childrearing.

The fertility rate of the US – a number which says “how many children would be born to a woman who survived to the end of her reproductive period” — was 2.10 in 2006, higher than the levels across eastern and western Europe and those in Japan, South Korea, Hong Kong, Taiwan, Ukraine and Russia. The ability of the young to pay for the aging population is more in the US than in other OECD countries. The US fertility rate is higher than the level required in the country (2.08) for each generation to replace itself.

The paper explains higher US fertility levels thus: “discouraging out-of-wedlock childbearing discourages childbearing”. “If the US were to eliminate all out-of-wedlock births and not replace them with marital births, its TFR (total fertility rate) would have been only 1.31 in 2004.

Births

Countries with higher proportions of births out of wedlock have higher TFRs: the correlation is 0.65 across 37 countries in 1999...Ironically, the maintenance of traditional family values, especially in the form of rigid norms about appropriate sex roles within the family and the sanctity of marriage as a childbearing institution, may be responsible for the low levels of fertility in many places,” the paper says.

In the US, 37 per cent of births in 2005 were out-of-wedlock, compared to five per cent in 1960 and 18 per cent in 1980. In Japan, only two per cent of births are out of wedlock and in Italy, 10 per cent.

The TFRs of Japan and Italy are 1.25 and 1.35, respectively. This is despite the fact that “Japan has made very costly efforts to raise its fertility levels. The programmes include generous child allowances, heavily subsidised state child care facilities, changes in educational standards to reduce the costs of child tutoring and laws designed to encourage men’s greater participation in child-rearing”.

Welfare benefits

In contrast, “the US tax code is not unusually friendly to families with children and welfare benefits per child are low relative to child allowances in many European countries. Government plays a relatively small role in day care for children in terms of both finance and management”.

Then, what made the difference? “The adaptations permitting more mothers to work were primarily a result of private negotiations between women and various childcare providers, including their partners. They were facilitated by institutional adaptations such as longer store hours, which provided both opportunities for shopping by people who worked during the day and jobs at an hour when a spouse may be available for child care...American businesses, less encumbered by industrial policies, may have been able to provide more flexible hours and days.”

The negative correlation between education levels and fertility is declining in the US, indicating that women are able to pursue both their careers and raise children. “Had bearing children not been a powerful goal of most American women, they would have found ample reason to avoid them by virtue of their increasingly tentative relationships and the growing attractions of work outside the home. Instead, they took advantage of their new powers to maintain a fertility level that is the envy of most other developed countries,” the paper says.

Will the India’s professional class go the US or Japanese way?

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