An economic argument for having children…

Posted: December 28, 2012 in Uncategorized

This is a post I’ve been meaning to write for awhile in response to an article from the NYTs back in November and a post from Reaction Norm. I’m a little late to the game, but the issues haven’t changed in the past month and a half…

By way of prologue, I’ve always wanted to have children and plan to do so once my partner and I move back to the good ole’ US of A. It’s never really been a serious question for either of us. And until recently I had always figured we’d have two kids, but lately after reading up a bit more on demographics I think 3-4 is more appropriate (although my wife thinks I’m nuts, but read the analysis below and see what you think…she may very well be right!)

So the argument for not having children whilst married seems to be, in part, a financial one. Children are expensive, retirement is expensive, so let’s put money towards an ideal retirement instead of having kids. The other primary argument is with respect to time. Kids take a lot of time, careers and hobbies take a lot of time, I (and my spouse) want a career and hobbies (and the money to enjoy those hobbies) so forget the kids let’s just focus on ourselves.

The other offhanded sort of reason for not having children is: “And if we decide against [having children], it will partly be out of concern for the welfare of others. My husband in particular worries that creating more human lives strains an already overtaxed planet.” (From the NYT article).

Yea, well that’s all well and good for trying to make oneself feel better about the decision (one has to wonder why couples deciding not to have children feel they need to provide a litany of reasons to mollify their apparent feelings of guilt). However, the truth of the matter is you wouldn’t be having the 7 billionth child in some 3rd world country, but in a 1st world country. And there are major demographic issues in all 1st world countries that threaten the stability and economic well being of those countries and the ability of the countries to provide support for an ageing population (e.g, Japan is a worst case scenario!).

With respect to the USA, we’ve always thought of ourselves immune to the demographic problems that are facing countries such as Italy and Japan due to massive amounts of immigration. However, it has become evident over the past 5 years that US demographics are becoming more European like. Whilst a fertility rate of 2.1 children per woman is required to maintain a constant population (not even a growing one!), the fertility rate in the US has dropped to 1.9 and there is a fear we will head to a European-like 1.4-1.6.

So what’s the big deal if the US starts to look like Europe fertility wise? The problem is that with a declining population and an increase in the number of retirees (read baby boomers) that live longer (thanks biomedical research!), an increasing number of tax paying workers are required to support the retired through social security and medicare (it’s discussed in a bit more depth here if you’re interested). This demographic time bomb is set to hobble the economies of the European Union (see e.g, Italy, Japan and Spain for a prelude). Is this the future we want for all of Europe or the USA? What would be the global effect of the US economy losing its dynamism because there’s not enough workers to support an aging population? You think our current economic situation is bad? You just have to look to parts of Europe or Japan to see how much worse it can get if left alone. And the scale would be much grander in the US due to the size of the US economy and our role in security (for better or worse) throughout the world.

Thus, while your life may be more enjoyable and you may make it further in your career more easily by not having children (but seriously, who are you kidding, are you some fucking wonder dynamo that is needed to save the world? Even Einstein had children, one before he published his groundbreaking special relativity shiznit in 1905). The decision not to have children is selfish (i.e, by definition thinking only of oneself and not others e.g, your country and all the elderly that require support) and unpatriotic; and collectively it is undermining the economic health and security of your country (if it’s a 1st world country) and the world (assuming you think it’s a good thing that the west/US are/is the dominant military power, by no way a forgone conclusion!).

How’s that for some over dramatic shit!

So get in the sack and start making babies already!

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Comments
  1. rxnm says:

    The baby boom is a problem, but one we need to solve, not repeat by creating a population feedback loop. Furthermore, the baby boomers are by far the wealthiest generation this country has produced and apparently will produce for a long time. They’ll be fine, and eventually they’ll all be dead and we can pick up the wreckage their insane nomming-it-all has left. The way forward to economic growth is not unsustainable population growth but by having a better (and better educated) workforce that creates more value per person.

    Immigration has been the driving force of U.S. growth throughout its history, and we have undergone constant demographic change at various rates as a result. Clinging to one particular slice of this demographic history as a natural or desired state is both a fallacy and impossible. This is the nature of history, and it is in particular a defining property — if not the defining property — of the U.S. Sane immigration policy would solve any workforce problem the U.S. could ever encounter. The list of immigrants who were going to ruin it all include Irish, Italians, Jews, Chinese, Poles, Hungarians, Russians, basically every non-English group (and some English groups) have had their arrival met with prophecies of economic and cultural collapse. If you had told the founders at the constitutional convention that the Supreme Court would consist entirely of Catholics and Jews in 200 years, they probably would have all quit in protest. Life goes on, we will all die, and we will all seem backward one day, our feeble attempts to guide history seen for the myopia that it is.

  2. dr24hours says:

    So much is wrong and elitist here! “…you wouldn’t be having the 7 billionth child in some 3rd world country, but in a 1st world country.” So, how much more are 1st world babies worth?

    This entire piece is clinging to a disatrous and toxic set of philosophies: that population growth is required to maintain economic viability; that continued population growth is even marginally sustainable; that the first world must retain its primacy.

    My addition to rxnm’s response is that we will always need unskilled labor, in order to afford to build things, and because many jobs must be done that do not require educations. Therefore, we must also develop technology and processes that allow unskilled laborers to be more productive as well, and not merely assume that better education for all will necessarily improve us economically.

  3. Huh says:

    Do you even think? A person in a first world country consumes 3 or 4 times the resources of people in a 3rd world country. The world does not need more American babies (I am an American), we use resources all out of proportion to our make up of the world population.

    The only “non-selfish” argument I can make for having kids is that once people have offspring they start to worry about things that will happen after the die. Ruining the environment starts to mean something to them because things that won’t happen for 100 years will effect their grandchildren.

  4. funkdoctorx says:

    @rxnm & dr24hours – I’m not talking about an increase in the US population, simply a stabilization of the current population. A fertility rate of 2.1 births per woman results in a stable population, not increasing or decreasing. Whilst I agree that the baby boomers are by far the wealthiest generation the planet has ever seen, they are also promised benefits well beyond the amount that was paid into the system (particularly through medicare, since health care costs are so expensive amongst the elderly; most of what I’ve read is that they get about $3 out for every $1 they paid in during their working lives) and there are LOTS of them! The only way to continue to pay for this is to borrow the money or through increased tax revenue. Consider that along with a declining size of the work force which means declining tax revenues, and there is clearly a time bomb awaiting the US (which is currently going off in other countries such as Spain, Italy and Japan).

    @huh – I did consider this idea that a 1st world baby would consume more than a 3rd world baby with respect to the environment, and the effects that could have on the planet, particularly in the US. But I consider this more of a “political will” issue. I.e, there are solutions to the problem that already exist and its a matter of our politicians (and the people who elect them) to actually enact them (which I’m all for, carbon tax anyone?!). To turn your argument on its head a bit, you seem to be supporting the position that only babies born in 3rd world countries should be allowed and we should limit or stop those born in 1st world countries so we can save world resources. However, it’s the 1st world that is going to have to come up with solutions to the problems we have created, which will become all the more difficult if our government is consumed simply by the need to take care of an ageing population.

    @ dr24hours – What I’m not saying, all things equal, a 3rd world baby is worth less than a 1st world baby. But at the same time, a 1st world child isn’t likely adding another mouth that cannot be fed, whereas it is more likely the case that a 3rd world baby is. Part of the issue with development in 3rd world countries, as I understand it, is that there are too many mouths to feed given the resources that are available and that the children are unlikely to get appropriate education and healthcare.

    On your point of “the 1st world must retain its primacy”, that’s a tough one. One thing I do believe, however, is that the world as a whole is likely more peaceful when there is an obvious military superpower as opposed to the constant wars that occur when there are many approximately equal claims to supremacy (i.e, see Europe for the past 2000 years). Whilst I certainly don’t think US hegemony is ideal, I think it’s better than many of the alternatives.

  5. Huh says:

    @FunkDoctorX – A) A first world mouth is one that will over consume food and drive up world food prices making several additional mouths in the 2nd & 3rd world starve. You see its a global market and 1st world and 3rd world food supplies are not segregated and fenced off from each other.
    B) The problem you claim to be addressing, funding social security, is also a problem solvable by political will. And your “solution” is to kick the problem into the future by continuing the cycle instead of addressing the problem head-on.
    C) The first world has decided for many different reasons (individually, not through organized effort) that it is going to self limit. You are arguing against the collective decisions of almost 1 billion people.
    D) The Japanese are approaching this problem by robotics research.
    E) If you want to raise the tax base in the US to support the aging, you could do so with a liberal guest worker program of immigrants that pay into the system but get no benefits. (Which is pretty much what we have now with “illegals” paying into the system, unless paired under the table in cash. They pay SS tax on someone-else’s SS number and get no benefit of that as a result. We could just recognize this situation, formalize it and make it legal. Its a hard pill to swallow because it effectively creates a 2nd class non-citizen. But I hear that is common in parts of Europe.)

    • funkdoctorx says:

      @Huh – You make some interesting points…
      A) It’s not clear to me that the food supplies of the 1st and 2/3rd world are the same. Food is perishable and the costs of producing the food need to be recouped, so it’s not clear to me that it is the same food supply; but I don’t know quite enough about the issue to come down solidly on one side or the other. Nonetheless, perhaps a solution would be increased adoption of 2/3rd world children to 1st world countries, could kill two birds with one stone?

      B) Well, to be nit-picky it’s not really social security I’m as concerned about as it is medicare since this will continue to consume greater amounts of the budget given that health care costs show little sign of abating (although there is some hope on that front I’ve read!). Could this be partially solved politically? Sure, I think so. But a fundamental assumption behind the programs is that there will be a stable/growing work force that continues to pay into the system. If you change such a fundamental underlying assumption, it stands to reason that there must be drastic changes to the program. For an example as to how this can play out see many European countries such as Spain and Italy that have major issues with supporting an aging population, and France is not far behind (and of course Japan is just plain scary, little to no economic growth for about 20 years!). Perhaps there needs to be fundamental structural changes to the programs as well, but Americans don’t seem to have much stomach for those.

      C) I’m not sure what you mean by saying that 1 billion people have decided to self-limit. I think people largely respond to whatever economic incentives are put forth, hence the reason that things like a carbon tax work (there’s an interesting article about Ireland’s recent experimentation with the carbon credit (http://www.nytimes.com/2012/12/28/science/earth/in-ireland-carbon-taxes-pay-off.html…incentives work!). I suspect a large majority of the “self-limiting” you may be referring to is just a byproduct of the incentives that exist in the modern world and are imposed by governments.

      D) I’m not sure how robotics research is going to help Japan’s demographic problems since they cannot reproduce. Robots don’t earn money and pay taxes. Here’s an interesting article about Japan and how it compares to the US (http://moneymorning.com/2012/12/26/why-japans-lost-decades-will-arrive-here-for-good-in-2016/). No mention of robots coming to save the day, and I sure hope the US doesn’t become Japan!

      E) This is an interesting point. I don’t know much about US immigration laws, but this strikes me as quite unfair, as you note. And I can’t emphasize enough, it’s not about increasing the tax base, but just maintaining it. All the assumptions that are made about taxing and funding assume a stable/growing population. If this assumption is violated then many things need to be restructured. An aging population is a very scary thing with very dire economic consequences.

      The sad thing is, is that those of us that do have children are most likely to be the one’s that bear most of the burden since we’ll be putting more resources to our children and less towards retirement…c’est la vie!

  6. Huh says:

    @FunkDoctorX A) Your idea of adopting more 2nd/3rd world babies is a valid one. Certainly that is an approach Angelina Jolie has famously taken. (http://en.wikipedia.org/wiki/Angelina_Jolie#Children) – If you scroll down on this page you will find that for the last 10 years the US has IMPORTED 2 to 3 billion pounds of beef a year. About 1/3 of that is from Canada, I think the rest is from Australia and 2nd world countries. It is nearly impossible to get further way from the US than Australia. So if its cost effective ship beef from Australia to the US, we can import food from anywhere on the planet. (http://www.mla.com.au/Prices-and-markets/Overseas-markets/North-America/Beef) And I think beef is a bad example because little of the 3rd world can afford it. But rice and grains are commodities that have long shelf lives and are traded on a world wide market. If the average American consumed rice like in the 3rd world it would cost them 0.3% of their annual income to buy it (and that is buying the highest grade most expensive rice I know of in the US). If the price of rice triples in world markets the American won’t notice, but in a country where food spending is 40% of income, its dramatic.
    This link (http://r0.unctad.org/infocomm/anglais/rice/images/fluxcommerciauxduriz.gif) goes to an image of world rice shipments in 1999-2003.

    B) Social Security or medicare, I lump them both together. Its a political problem created about 80 years ago as a federally mandated ponzi scheme. The only possible solution is a political one. Anything else delays the problem to be solved later.

    C) The limiting in the first world seems to mostly be the decision among the people in their twenties to put education and/or career first and start families later. This has lead to a boom in fertility clinics. But it means many more people having 1 or 2 children instead of 3 or 4 or 5 or 6. There is also a time element. You can spend much more time with each child if you have fewer children. I like this as a parent, I can’t imagine having enough children that you literally loose track of them. There is no government program in the US that gives incentives for fewer children. One of the conservative political complaints is that welfare almost provides incentives to have more children.

    D) What do you mean robots can’t reproduce? Robots can build cars, they can build more robots too. 🙂 What I mean is that Japan is working on robots to literally help take care of the elderly to lower the need for human staff to look after the aging population. http://usatoday30.usatoday.com/tech/news/robotics/2009-11-04-japan-robots_N.htm
    Your article is the first one I have seen to link Japan’s lost decade to demographics. However its important to note that right after the dot com bust in 2001 combined with the 9/11 shock to the US economy that the US experienced a lost decade. Only the lost decade was a boom while you were in it, but the crash brought things back to where they were before the boom. Fast forward to 2008 and 2009, another crash and nearly the whole world experiences another lost decade where all of the gains from 2002 to 2008 are wiped out. It not a legitimate stance to blame Japan’s economic development from 2000 to 2010 on its demographics when the rest of the 1st world counties have suffered major set backs during the same period.
    Its also bad to compare Japan to the US because Japan has to import so much of their raw materials where as the US has vast raw materials in North America but consumes so much that we STILL have to import. (See my original point about 1st world mouths vs 3rd world mouths.)

    E) You are talking about “maintaining” the status quo tax base by “adding” to the projected tax base if current trends continue. Your adding people to the tax base no matter how you want to word it. I agree that the situation is unfair what I amazed about is the people who believe the opposite is true. How ever it is possible that this would still be a win/win. That is people would still make so much more money in the US as apposed to their home countries that they would happily work here even under such unfair rules. (We in the first world really can’t grasp the situations facing people in the 3rd world. Americans are horrified that 3rd world children work in sweet shops to produce our goods. But that might be better for the child than starving or having to work in a brothel.)

  7. Oh good, I see others have already made the points I was going to make about 1st versus 3rd world consumerism rates and environmental footprints, as well as opening up immigration to both a) ease overpopulation in resource-poor regions and b) bump up the tax base. So I’ll focus on things like this:

    “Yea, well that’s all well and good for trying to make oneself feel better about the decision (one has to wonder why couples deciding not to have children feel they need to provide a litany of reasons to mollify their apparent feelings of guilt).”

    Wow. Just, wow.

    Have you considered that those of us who choose not to have children* are constantly required to justify our decision to others? Friends, family, colleagues, and even complete strangers at parties feel perfectly justified in telling you that you’re making the wrong decision and to DEMAND that you list all your reasons so they can argue with them all. I am not kidding – this happens to my husband and me (mostly me, as the woman) at least once a month. There’s one couple in particular, friends of friends, we are easing out of our lives right now because they will NOT let it lie and keep pushing us to justify ourselves every time we see them, then argue against all of our points, despite not even knowing us all that well. I’m very much hoping it stops when I get older, because right now it just stresses me out that so many people refuse to accept either our decision or our reasons for it.

    I love kids and have lots in my life – 6 nephews and 1 niece with another niece due next week, plus tons of friends’ kids – and I love spending time with them. (I don’t, as you seem to in this post, treat them as an economic resource – they are awesome little individuals who are hella fun to hang out with). However, I just know and have always known that it’s not for me. I firmly believe that only those people who are fully certain about and committed to parenthood should have kids – I know too many people (friends and extended family) who had kids despite being ambivalent about it or, more commonly, without giving it much thought at all, it’s just what people do after X years of marriage or whatever. In several cases, it looks like having been the wrong decision for them – they didn’t seem to have appreciated the commitment required and the toll it would take on their own lives. Those parents don’t seem happy to me, and – more importantly – the kids don’t, either.

    “The decision not to have children is selfish (i.e, by definition thinking only of oneself and not others e.g, your country and all the elderly that require support) and unpatriotic; and collectively it is undermining the economic health and security of your country (if it’s a 1st world country) and the world (assuming you think it’s a good thing that the west/US are/is the dominant military power, by no way a forgone conclusion!).”

    Do you seriously think it’s better to pressure people into making a decision that’s wrong for them, will be wrong for their kids – honestly, they are individuals, not an economic resource – and will increase the already considerable strain on the global environment – than to let people do whatever they decide is best for them without pressure or interference, and find political work-arounds for the economic situation?

    Sheesh!

    *for multiple, very legitimate, reasons, the planet already having way too many people on it being one of them for my husband and me – if we change our minds, we’ve agreed to pursue adoption as a first choice.

    • funkdoctorx says:

      Hi Cath…thanks for your thoughtful comments.

      Perhaps my tone was a little over the top in the post and I didn’t address all the emotional aspects to having children, but I completely agree that if someone does not want to have children, then of course they shouldn’t. But my post was primarily in response to the idea of making the choice of having children or not on economic grounds (e.g, see the NYT article). The argument there is primarily economic, so my focus was primarily on the economic side of things. If people don’t want to have kids, that’s all fine and well, but if one is going to argue for not having kids because of the financial benefit, then I think it’s worth looking at the opposite side of the coin, i.e, what are the consequences of a lower fertility rate. Are we prepared for it? Do we realize our part in it? Programs that support the elderly in the 1st world rely upon the idea of at least a stable working population.

      So if the decision is to reduce the burden on the planet by decreasing the first world population, but allowing millions of seniors to live in poverty with little access to affordable medical care in the future, so be it (it wasn’t so long ago that this was the case!). But at the very least I believe strongly that we should understand that this is the consequences of the decisions being made by millions of people. I agree it’s a bit cold to boil the idea of children down to economics, but is it any less frigid to unwittingly undermine the demographic assumptions behind the funding of the social safety net? To ignore the fact that people, including children, do not play a role in the larger economy is naive.

      Maybe I’m misunderstanding what I’ve read about demographics and my conclusions are flawed; I’m not an economist by any means, just a concerned citizen. But all of the comments thus far don’t even address the demographic concern. If couples don’t want to have kids, do I think its selfish? Sure…do I care that it’s selfish? Not at all. I make plenty of selfish decisions, such as saving money, travelling, working on my career etc. instead of donating all my extra money and volunteering as much as possible. I don’t run around preaching that everyone have kids, do whatever you want, it’s a free country. All I’m trying to point out is that the decision to not have children has consequences which may be more dire than most people consider…I mean, did you and your husband consider demographics before having children? Maybe it would have swayed you, but probably not. But at least you would have been making a more informed decision…

  8. The BBC ran an article last week titled “Is America becoming Europe? Five US birth rate myths” – you might be interested, if you haven’t already read it.

    “I don’t run around preaching that everyone have kids”

    Is that not exactly what you did in the original post?

    “did you and your husband consider demographics before having children? Maybe it would have swayed you, but probably not. But at least you would have been making a more informed decision…”

    Yes, we did – GLOBAL demographics, as I mentioned in my first comment. We’re both very much aware of the environmental problems we’re facing as a species, to which overpopulation undoubtedly contributes. I see these global problems as much more important than maintaining the economic primacy of any given country (especially when it’s not my country) or region of the world. As I said, though, that was just one of several personal reasons for our choice.

    But hey, thanks for calling our decision ill informed (and selfish)! As one of the first couple of generations of women to actually get a meaningful choice in our childbearing preferences, it sure is great to have such helpful and respectful input from you and, as I said before, all the other people I meet who seem to think it’s their business…

  9. funkdoctorx says:

    The article you note is interesting with respect to the US, however, it simply serves to emphasize that declining birthrates in Japan and Europe are downright scary. Whilst my post focuses on the US, the issue of low fertility certainly holds true for Europe and Japan as well. Maybe it won’t happen in the US, but what IS occurring in Europe and Japan is not sustainable. It’s quite sad really.

    And as I’ve said repeatedly, it’s mostly about being able to support an ageing population that continues to live longer, not economic supremacy. Who do you think pays into social security and Medicare (in the US, or the equivalent healthcare/retirement system in Canada)? If there are increasingly more elderly and fewer working age people, how are we supposed to support them? If an increasing percentage of GDP goes to supporting the elderly, that means less money for lots of other important things, like scientific research. It’s just simple math and eventually the shit is going to hit the fan, particularly in these low fertility countries.

    So please, pardon me if I give a shit about the elderly. Someone around here has to!

  10. Anonymous says:

    So, believing that immigrants are just as capable of paying taxes as are people who were born here equates to not giving a shit about the elderly, eh?

    Riiiiiiiight.

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