The World Is Having Too Few Babies, and Too Many

highest fertility rates in Southeast Asia. We hear a little about that country's baby boom in a minute why it's a headache for the government. I also have a wide ranging conversation with the renowned social policy expert is about sore Hill on the economics and politics of supporting families in the US. But first you might be surprised to hear that young American women without children are now richer

on average than men who make the same choice. An increasing number of women are enjoying the freedom and extra cash that comes from a child free existence, and good for them, but it may not be quite so good for the US economy, whose working age population has just fallen for an unprecedented third year in a row. Here's Bloomberg's US economy reporter Molly Smith. Anna Dixon has a great job, tons of friends, a long term boyfriend, and

a travel history that make anyone jealous. She also has no kids, no plans to have them, and no regrets. For me, I love being able to very quickly get up and go and travel somewhere or whatever I want. I also want to enjoy my time and not have to worry about the responsibilities all the time back home, especially when it comes to kids. I think that makes it much much harder to just be flexible which travel

when you have kids. Some of those treatoms are a lot. Dickson, who's forty two and works as a product manager at Google in New York City, is part of a growing cohort of women who are putting off having children or foregoing motherhood entirely, and as a result, they're advancing further in their careers than generations passed and accumulating a lot

more wealth along the way. Single women without kids had an average of sixty five thousand dollars in wealth in compared with fifty seven thousand for single child free men, according to research from the Federal Reserve Bank of St. Louis. For single mothers, the figure was only seven thousand dollars. Then there's the cost of having kids to consider, which is only rising. With US inflation near a four decade high.

The expenses and bringing up a child born in through age seventeen will run more than three hundred ten thousand dollars, according to estimates from the Brookings Institution, which adapted a government calculation to adjust for inflation trends. That added about twenty six thousand dollars and doesn't include the cost of

a college education. M little consequence from your earnings of having kids UM and sort of the motherhood penalty, but abouslye the like you know, non lether fomis character into that. This is Julie cash In, director for Women's Economic Justice at the think tank Century Foundation purpose UM the women's movement that it's not in my choices for women like it's it's to really make it for that every viable one UM come should not be a thing that dictates

that UM which terminally is right now. Parenthood was losing its appeal even before and the hardships brought on by the pandemic appears to have accelerated the trend. Think of things like zoom, school and childcare issues, to name a few. A few Research Center study last year found that percent of Americans ages eighteen to forty nine who don't have kids say it's not too likely or not at all likely that they will procreate someday. That's up from thirty

seven percent. In with this newfound wealth comes new opportunities. Single child free women are an emerging consumer group with a lot of spending power. More of them are ying homes, gravitating towards brands with progressive values, and perhaps most of all, traveling. Here's Rachel Boone, sor vice president at GfK Consumer Life.

They have that money to sort of do what they want with it, and I think, you know, the general trend of experiences over possessions is not brand new by any means, but this is definitely one of the sort of audiences that is really prone into that. Dixon has embraced this aspect of her life with trips to Alaska, Switzerland, and Anguila on the last year. Those vacations have largely been with friends from a group of about people who

are mostly unmarried and don't have kids. Ultimately I started meeting all these people who were living these incredible lives and traveling all the time and had great jobs, and we're going out and having fun and um, you know, dinners together and traveling together and activities. And I just said, I,

that's that's the life that I want. Seeing other people not have kids and seeing other people who uh were living that life definitely validated it for me that that was something that I could do and be happy doing um, and that that was really really appealing to me. It all fits into a broader rethink on the concept of family that's at the heart of the research of the DC based think tank Family Story, led by Nicole's Susster Rogers.

There's a pretty widespread culture reckoning with the notion of family as beyond biology, you know, not just for England, and I think there's a lot of people for people feel less of an obligation to the family they were born into in all sorts of ways um and were actually and I think to embrace this notion of children's family. Of course, this lifestyles have its drawbacks. People who are single and child free pay more in taxes and housing.

There is a lot harder to afford on one income than too, especially with home prices and rents near record highs and mortgage rates on the rise. Another worry for those without children is who will care for them in their old age, But as Dixon points out, it's not as if adult children always come through for their parents. For her, the pluses of parenthood don't outweigh the minuses

um Alice and Janny. I read that she said this a few years ago, and it really really resonated with me, which is that I would much rather regret not having

kids than regret having them. For Bloomberg News, I'm Molly Smithy. Now, clearly it has economic implications for the US or any other developed economy if women are systematically choosing not to have children, and we will get into that in a minute, but first, since we are always global on Stephanomics, I wanted to zip briefly to the other side of the world and a country that potentially has the opposite problem, the Philippines, which along with Indonesia, currently has one of

the highest fertility rates in Southeast Asia two point five children per woman. In fact, it's one of the handful of countries that the United Nations expects to account for fully half of all global population growth between now and twenty and that is posing its own challenges. Siegfried Delgado is our economy reporter and Manila, Siegfried, I know you're in the middle of reporting this story, so thanks very

much for taking the time to do this. What's going on? Okay? So, UM, there's really an art shoot of the World Population Prospects reports. As you mentioned, UM identifies the Philippines along with eight other countries, which will account for more than half of the protected increasing global population until twenty fifty. So we're really looking at UM, you know, what's the driving force

behind this statistic? Because if you look at the birth rate UM or the fertility rate in the Philippines, it's actually declining in recent years. However it has remained high. So what we're really trying to do UM answer here is you know, why is this the case and what can the UM the government due to sort of slow the birth rate. In order to read benefits of demographic dividend,

we should probably explain the demographic dividend. So that's what happened in a lot of East Asia economies and was one of the things that helped to support their growth. You're growing fast at the same time as your population growth is slowing very rapidly. So you end up with a bulge of lots of working, high saiving um people in the economy contributing to growth who don't have the

same large number of dependent children. And that gives a sort of period where the economy is a kind of turbo charged by having those extra workers relative to the number of children. Is that what that's basically what we're talking about, isn't it. Yes, Yes, that's it. And what's happened. The problem for Philippines and Indonesia has been that this this demographic change has been too slow really to get that dividend. Why do you think the Philippines in particular

has struggled with this demographic change? And it seems like the government has has had difficulty when it's tried to address this issue. Okay, so Stephanie, officials have a multiparmed approach to addressing this issue. They have health measures, they have economic measures in place which are aimed at slowing the birth rate. They're trying to update the economic development planned. You've focus on reducing adults and pregnancy, and you know,

addressing admit demand for family planning among couples and individuals. However, UM these measures actually face a lot of sombing blocks from cultural, social, and even fiscal factors. UM family planning is viewed as taboo UM in the Philippines, where of the population identifies it as Catholic. It took about thirty years for a reproductive health measure to be passed into

law in twenty twelve. This law was viewed as a cure all for maternal care, family planning, and sex education issues, but it faced another two year fight at the Supreme Court, and when finally implemented, women's rights groups and other stakeholders said key provisions including teenagers access to contraceptives for watered down.

There are also misconceptions about contraceptives that are circulating in social media, and this presents a challenge to policymakers and healthcare workers in offering birth control options, particularly to vulnerable groups such as the poor, end and educated. Filipinos are among the heaviest Internet users, spending hours on end on social media, and while the Philippines does have a population management program UM, it continues to compete with other priorities

such as infrastructure and disaster risk management. For an already stretched budget and they think, you know, when you talk about priorities and budgets, Um, this is something that's apparent in a lot of immerging market economies. And I guess the big issue for you know, we heard earlier in the program about you know, young women enjoying that the the opulence that the relative opulance that comes with not paying the cost of childcare and the cost of raising

a child. I mean, I guess the flip side of that in the Philippines is is exacerbating inequalities and poverty. To have this high birth rate, which I think is concentrated in lower income part of the of the population. Is that right, it is It is typically the urban poor or women in the countryside that black access to maternal care and family planning services, and you know, um,

traditionally they are they're just more vulnerable. So this actually poses as a huge challenge to the economic team of President Ferdinand Marcus Jr. Who actually targets to bring down a stubbornly high poverty rate in you know high teams currently and uver down to single digits by the end of his term. See Fi de Lagado. Thank you so much.

Thank you, Steph M Well, I'm delighted now to be joined by Isabel Sawhill, who's a senior fellow in economic studies at the Brookings Institution in Washington and also head of the Center on Children and Families. UM. We heard from my colleague Molly Smith there earlier Isabel about what for some it is eliberating phenomenon. You know, young upwardly mobile women choosing not to have children. But for a developed economy like the US, it's it's not necessarily good

economic news. If more and more women are making that choice, right, Well, I think it depends on your perspective. I mean, there are many people who say that if we don't have enough children, we will not have a later on enough adults to um pay into the obscurity and medicare systems and support our social insurance policies. But others would say no, from an environmental perspective, it's better to have fewer children coming into the world. And if we need more people

in the United States, we could always import. I mean, people want to immigrate to the US, and raising barriers to immigration would give us any rate of population growth we might like. And there was something specific that happened

in the pandemic something of a of a baby bust. Um. How significant was that there was a baby bust during the COVID crisis, and I think it was temporary, most likely temporary, but superimposed on a longer term trend, which has been that fertility rates have been dropping for a

long long time. And I think that's mainly related to the fact that women have more opportunities uh than they used to, and the cost of dropping out of the labor force or even cutting back on one's career ambitions are getting much more expensive and much more constantly went shall for most women. And I guess we we heard actually Molly talk about the baby penalty or the motherhood penalty, and of course the flip side of that is a it was a benefit if you are not taking time

out to have have kids. I guess the other side of this, which you have um you have described in some of your work for Brookings, is that the costs of raising a child have swords. So there's the there's the opportunity costs what you're losing in the workforce, but also the sheer costs that go into bringing up a bringing up a child. Yes, that's right. The just the direct costs of raising a child are now over three

hundred thousand dollars. That's over the entire childhood period, and it includes everything from extra costs for housing and food to childcare and extra education. Does not include college though, so if we included college or university training, that figure

would go way up. Now that figure was calculated for the typical middle class family with two children and a married family, so it would be it would vary from you know, what you're depending upon what you earn and where you live and many other factors, how many children you have. But that's the that's gives you a rough sense of the of the costs of raising a child.

And as you just said, that does not include the fact that one parent, typically the mother is going to have to take some time off and or um herb her own career aspirations, and that is very very costly as well. President Biden, one of the things he was going to do is support families and um give um, give more money, make it more of a financially viable choice to have children. How's that played out? That's exactly right.

President Biden had a build Back Better plan that included major support for families in the form of child care, in the form of child tax credits that are like a child allowance, uh, and in the form of paid leave, And none of that has happened because the US Congress failed to ever enact any of those proposals. So we are stuck as being one of the countries amongst all of the advanced countries, all of the rich countries, of

not doing very much for families with children. So if you want to have children in the US, um you're going to have to pay for most of it yourself. Are we potentially looking at a different balance? The babies that are born are potentially going to be more skewed towards um the lower income families. I'm sort of thinking about how the change in abortion laws plays into this. It's already much harder in most states of the US to get an abortion than in other parts of certainly

than in Europe. UM. But that would that would be be limiting the choices of young women in another way if they don't have the financial means to to go somewhere else. That's exactly right. We know that unplanned pregnancies, which are typically what leads someone to seek an abortion, unplanned pregnancies are much much higher amongst low income women,

amongst women of color, amongst they're less educated. So they're the ones who are going to be hurt most by these restrictions on abortion, and we're going to see more unplanned pregnancy, more to see some most very young, disadvantaged women, and that is going to put a burden on our

social assistance system, which is already not very robust. And in fact, we did some analysis at Brooking's that shows very clearly that the states who are being most restrictive on the on the abortion front are also the states where, um, the most disadvantaged children live and where government policy does

the least to help them out. I was going to say, are those the states that would one would think naturally be in favor of giving more support for people having children if you're so encouraging of people to have children. That doesn't sound like the chronicle that the states that are are most eager to restrict abortion are also the ones that are doing the least to help families with children. I mean, stepping back. We had also had a short chat with one of my colleagues in Manila, because the

Philippines has the opposite issue. It has had a very slow demographic transition. They've struggled with that actually for for for cultural reasons, and that there has been pushed back from the largely Catholic population on efforts to increase family

planning and everything. It is a very difficult balance for modern economies to strike between um having enough population, encouraging families to bring up children and making it easier, but on the other hand also making it possible for people to make choices about family size and the way they live their lives. Are we any closer to finding a balance or is there still a difficult balance to strike even in economies that have been very rich for a

very long time. Well, I think it is a difficult balance, and I think that uh, the biggest example of this is China. Uh. China for many years had this one child policy, and then suddenly they realized that they weren't going to have enough people to both man the economy or provide the labor force they needed, and also not enough people to support a growing elderly population. So you do get an imbalance in the age structure of the

population when you suddenly have a decline in fertility. So the Chinese have now shifted and are moving towards encouraging people to have children, and so they kind of made

a mistake and they're now realizing it. So they're the probably the best example of the kind of imbalance you're talking about because at the same time giving women more options interesting careers that they might choose to Another thing that came up briefly in Molly's pieces that we also have other allegiances, new bonds that we've we've formed with friends and other sort of groups that we've sought out in life, you know, become kind of more important or

as important as as as family bombs. I guess that's a that's a yes. I'm not sure. I think that there's certainly are efforts for people to connect through social media, but personally, I think those bombs are much weaker than the ones that occur in person and that require lots of time they voted to the relationship, and that are less performative and more real, if I can put it

that way. So I don't think that that's going to replace uh, family ties, but I do think that um people are going to have smaller families, and they're going to have them when they're older, rather than when they're just out of high school. For example, we know that the amongst the educated women in America at least uh, they are marrying and having children much later than they used to. And that's a healthy trend in the sense that they're mature enough uh to devote time and resources

to their children, and they know what they're doing. They've planned to have these children, and they're devoting the time of vote parents to doing that. What's happening is we are not seeing the same thing amongst the less educated. Amongst the less educated, we're seeing more and more um uh people just having children without having a plan for how to pay the costs of raising them and how to spend the time that it takes to raise your job.

It's fascinating. Isabel Soil, thank you so much. Thank you. Well, that's it for Stephanomics. I'm off to persuade my children not to go to college in the US. But tune in for a special episodes next week from the Bloomberg New Economy Forum in Singapore and check out the Bloomberg News website for more economic news and views on the global economy. You should also follow if you don't already

at economics on Twitter. This episode was produced by Summer Sadi Young, Young and Magnus Hendrickson, with special thanks to Carmen Rodriguez, Molly Smith, Siegfried Alagado, and Isabel Sawhill. Mike Sasso is the executive producer of Stephanomics