In a New York Times blog post this week, Katrina Alcorn highlights an alarming new study revealing that fewer than half of millennials are planning on having children.
In 1992, Stewart Friedman of the Wharton School at the University of Pennsylvania authored a study investigating the relationship between work and family. In that study, he found that 78% of Generation X graduates said that they planned to have children. Twenty years later, he ran his calculations again, this time on his millennial students. The percentage of graduates that said they wanted children, he was shocked to learn, had dropped by about half, to 42%.
Why the change in attitudes? The Recession seems to be partly to blame. Writes Alcorn, "Millennial students were steeling themselves to enter jobs where a full-time commitment means working 72 hours a week. A majority of millennials in the study said they wanted to have children someday; they simply didn't see how they could make it work." It is time, she says, for Americans to reassess their over-commitment to work. And perhaps it is also time for our nation's legislators to reassess the policies that overburden young families, as having children seems to be one of the best ways to rectify some of our economic woes.
When American parents take on the burden of bearing and rearing a child, they deliver a huge dividend to society. So concludes a team of economists from Berkeley and Syracuse universities intent on assessing "the net fiscal externality to being a parent."
Through careful economic accounting, the researchers assess, on the one hand, the costs a couple incurs as a consequence of becoming parents and the costs society at large incurs through their parenthood and, on the other hand, the economic benefits realized by the couple and by society because of their parenthood. These complex calculations yield the researchers' "central finding" - namely, that each child parents raise constitutes a net benefit to society amounting to $217,000 in 2009 dollars. In the rather opaque language of economics, "the net fiscal externality of becoming a parent is [thus] positive and substantial." Elaborating on this finding, in the same almost impenetrable jargon, the researchers assert: "Becoming a parent is tantamount to providing society with a non-depreciating capital asset that generates an annual flow of revenues, in perpetuity, such that the present value of the asset (at an interest rate of 3 percent) is $217,000." Clearly, there are "substantial public benefits to childbearing."
The Berkeley and Syracuse scholars recognize that analysis "could contribute to policy debates." In particular, they note that their analysis may compel rethinking of how "public-sector transfer programs" can so divert the financial benefits of having children from parents themselves to society at large that it "distorts the incentives guiding individual fertility choices, perhaps leading to a suboptimal level of childbearing." The researchers note, "Although overall fertility has remained fairly constant in the U.S. since the early 1980s, the prevalence of biological childlessness among women who have reached the upper limit of childbearing age has risen since 1975, and by 2008 it was nearly 18 percent."
Such childlessness is understandable in an economy in which "the private costs of raising children are high." And since parents' childrearing activities "produce a substantial fiscal dividend for society as a whole," the researchers plausibly reason that perhaps it is time for "adjustments in taxes or subsidies [that] could internalize these social spillovers and move fertility closer to its social optimum."
To illustrate the political implications of their calculations, the researchers cite a 2001 case in Germany in which that country's highest court ruled that "it was unconstitutional to tax parents and the childless at the same rate . . . [because] parents, through their childbearing, produce the future workers needed to keep the [nation's public] insurance system solvent while the childless do not." Given the projected insolvency threatening our own country's Social Security and Medicare programs, the researchers have very good reason to suggest that as American policymakers try to deal with "the long-term fiscal imbalances resulting from an aging population," they may learn something from Germany's high court.