Midlife crisis takes shape in the United States


Demography is fate. For decades America has enjoyed the economic and geopolitical fruits of its high birth rate. Between 1990 and 2010, fertility levels in the United States were above the average for all developed countries except Israel, Iceland and New Zealand.

So what does it mean that the birth rate in the United States is poised to dip below Europe’s recent trend rate? In 2007, just before the Great Recession, the total fertility rate in the United States, the number of births a woman is expected to have in her lifetime, was 2.12. In 2019, just before Covid-19 hit, it had fallen to 1.71.

Provisional data from the CDC for 2020 shows that the total fertility rate has since fallen to an all-time high of 1.64, roughly the rate in Europe over the past five years. If the current trend continues, as it is likely to be stalled last year (it’s a little harder to get pregnant during a pandemic unless you were already with a partner), then the New World may have a fertility lower than the Old as soon as this year.

Too bad for what the economist Nicholas Eberstadt dubbed America’s “demographic exceptionalism”. For decades, the birth rate in the United States has helped support growth, which is a function of people, productivity, and global status. But according to a new report from the Global Aging Institute and The Terry Group, titled “The End of US Demographic Exceptionalism,” all of the factors that propelled America’s aberrant fertility – from immigration and religious denominations to optimism long-term economic – are now in decline.

The author of the report, Richard Jackson, director of GAI, notes that a certain humility is in order among demographers (“no one saw the baby boom coming”). Still, there is little reason to believe that the birth rate in the United States will rebound anytime soon.

Yes, the massive post-Covid stimulus has boosted animal spirits. But Millennials “are a marked generation,” says Jackson, coming of age during the 2008 Great Financial Crisis and the pandemic. “People tend to have children when they feel economically secure,” he notes. For young people in charge of debt, unable to buy a house and start a family on the same schedule as their parents, that feeling is elusive.

The decline in birth rates has been particularly strong among Hispanics, which Jackson and some other experts attribute to a sense of economic and cultural vulnerability, which certainly intensified during the xenophobic years of Donald Trump’s presidency. Net immigration, which boosts the overall fertility rate, has fallen to about half of what it was five years ago, even as the cost of having and caring for a child has risen.

President Biden has, of course, made health, education and child care a top priority for his administration. This is good for job creation and productivity, and may also help marginal birth rates if women find it easier for them to balance work and family.

But the results of “pro-natal” policies to increase fertility are irregular. Many countries in Europe, for example, have much better social safety nets and publicly funded child care systems than the United States, and yet smaller families have become the new normal.

It may be that boosting growth in general, and thus a sense of economic optimism, is ultimately a better way to raise the birth rate, an argument that Republicans concerned about Biden’s stimulus package did.

This is because the United States will need creative, bipartisan thinking to deal with the scale of its demographic downturn and the potential economic and geopolitical consequences. The declining demographics and the associated costs (such as elderly care and the debt burden of Medicare and Social Security) are a major reason why the The Congressional Budget Office predicts lower productivity and slower growth in the United States going forward.

Reintegrating women who have been disproportionately affected by Covid-19-related unemployment into the workforce is an important way to turn the tide. But so are making immigration less restrictive and finding ways to put older people who have a high level of education and experience back into the labor market. “Seniors are not only the largest underutilized resource in the United States, but also the fastest growing segment of the population,” says Jackson.

We need them and they need work. The post-pandemic asset boom, coupled with workforce disruptions, has led many baby boomers to retire earlier than they could have. But given that median retirement savings in 2019 for Americans aged 55 to 65 was only $ 144,000 per household, it’s hard to imagine that working longer isn’t the new normal.

The public sector could help incentivize older people to enter the labor market with policy adjustments such as reducing payroll taxes for older people, or by making health insurance, rather than private insurance, them. priority health care for older Americans.

Currently, private insurance is the first port of call for those still employed. This creates costs for businesses, which may be willing to hire more seniors if they don’t also bear the direct burden of their healthcare costs.

For most of its history, America has been obsessed with youth. His future can be defined by how he ages.

rana.foroohar@ft.com



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