Economic Scene: Pro-Baby, but Stingy With Money

In December, Ross Douthat wrote an Op-Ed column for The New York Times titled “More Babies, Please,” which noted that the United States’ relatively high birthrates would give it an edge against aging rivals around the world.

But there is an odd inconsistency in conservatives’ stance on procreation: many also support some of the harshest cuts in memory to government benefit programs for families and children.

First Focus, an advocacy group for child-friendly policies, will release on Wednesday its latest “Children’s Budget,” which shows how federal spending on children has declined more than 15 percent in real terms from its high in 2010, when the fiscal stimulus law raised spending on programs like Head Start and K-12 education.

Some school districts have been forced to fire teachers, cut services and even shorten the school week. Head Start has cut its rolls. Families have lost housing support. And the 2014 budget passed by Republicans in the House cuts investments in children further — sharply reducing money for the Departments of Education, Labor and Health and Human Services.

Birth rates have dropped precipitously since the onset of the recession six years ago — to 63.2 per 1,000 women of childbearing age in 2011, the lowest at least since 1920. The total fertility rate of American women — the number of children they will bear in a lifetime — fell to 1.9, the lowest in a quarter-century, well below the 2.1 children per woman needed to maintain a stable population.

The abrupt decline has multiple causes, including less immigration from Latin America, where women tend to have more children. Bruce Sacerdote, an economist at Dartmouth College who has studied fertility, surmises that the deep recession and weak recovery produced enormous pessimism about the future, prompting many families to postpone plans to have children.

But perhaps the biggest factor affecting families’ decisions to delay childbearing, cut back on their numbers of children or even forgo having babies entirely is the cost of rearing them, either in money or the value of women’s time.

“It is all about the costs and the opportunity costs for women,” notes Professor Sacerdote.

After more than a decade of stagnant incomes, many families stressed by the rising cost of providing an education to their children appear to have concluded they are too costly.

Fertility can rebound. It has done so before. Birthrates plummeted in the 1960s and 1970s as women by the tens of millions opted out of their traditional role as housewives and mothers, went to college and got jobs — postponing and often forgoing what until then had been the classical American family of a single male breadwinner and a stay-at-home mother.

In economists’ terms, women’s “opportunity cost” of children rose. By the middle of the 1970s, the fertility rate of American women fell to just over 1.7 children from 2.7 a decade earlier.

But fertility didn’t continue to fall. By 1990, it had bounced back to around 2.1, the rate needed to stabilize the population.

In an important study, Professor Sacerdote and his Dartmouth colleagues James Feyrer and Ariel Dora Stern noted that families worked out a way for women to accommodate children and a job. In 1975, women performed three-quarters of the family hours devoted to child care, according to the Multinational Time Use Study. By 1995, they performed 60 percent.

In 2012, men in families with children under 6 spent 59 percent as much time as women performing primary child care duties, compared with 45 percent in 2003.

This shift in cultural norms within American families can explain why fertility in the United States is higher than in many other advanced nations — places like Japan, Germany, Spain and Hong Kong, where women still shoulder an overwhelming share of child care.

But though American families may have adapted better than others to women’s march into the labor force, the United States lags far behind in providing the government support that makes it easier for many couples to start a family.

There is widespread evidence that government assistance to families increases fertility. France’s generous child subsidies, for instance, have been credited with lifting that nation’s fertility rate above 2, from about 1.75 in the mid-1990s. A study in Quebec found that increasing benefits to new parents by 1,000 Canadian dollars increased the probability of having a child by 16.9 percent. One study in Sweden traced its higher fertility compared to other Scandinavian countries to government programs like paid leave and subsidized day care, which made it easier for mothers to work.

Article source: http://www.nytimes.com/2013/07/24/business/economy/pro-baby-but-not-in-an-economic-sense.html?partner=rss&emc=rss