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Misunderstanding the Fertility Crisis

The DINKs video isn’t shaping culture—it’s a cultural response to the rising opportunity cost of having children in free and prosperous societies.

· 10 min read
Misunderstanding the Fertility Crisis
Photo by Jimmy Conover on Unsplash

Several years ago, I bumped into a conservative acquaintance in the green room at Fox News. He had just been on air, and I was about to go on to talk about my area of expertise, the latest immigration controversy. (Yes, this is a very DC story.) I asked him what he was working on and he said, “The fertility crisis.” I was broadly aware of concepts like the demographic transition, falling total fertility rates, and how even immigrants from high-fertility societies rapidly decrease their fertility after arrival. Well-worn books by Bryan Caplan, Jonathan List, and Julian Simon about how children and a higher population are great and why falling birth rates are bad have been with me for years, but this was the first I’d heard of a crisis. 

Knowing that I worked on immigration policy, my acquaintance said that immigrants assimilate too rapidly to America’s low-fertility culture and we have to find a way to slow assimilation to boost the birthrate. I disagreed vehemently because I support cultural assimilation (which is going well, by the way), but also because he had misdiagnosed the mechanism. “They’re not assimilating to America’s low-fertility culture,” I said. “They’re assimilating to high opportunity cost in the United States, which is the reason why they’re here in the first place.” He asked what I’d do to increase fertility if that were the only outcome I cared about. After clarifying that I don’t support this policy, I said that I’d massively increase marginal tax rates on the second worker in any household to force them out of the labor market, which would lower their opportunity cost of having children. Then the producer came out and hustled me on set.

That conversation has stuck with me because people who worry about low fertility focus on vague cultural explanations and don’t look at the simple one staring them in the face: microeconomics. Opportunity cost is what you must give up to buy what you want in terms of other goods or services, but the concept applies to every action you take. If I go to the movie theater on a Friday at 7pm, I give up the opportunity to spend that time watching a Netflix movie at home. The cost of going to the movie theater is watching the Netflix movie at home, or any other activity that’s second on my list of desires. The more options I have, the potentially higher the opportunity cost I face. 

Our wealthy, productive, and vast modern world is full of economic opportunities for men and women, as well as a fantastic array of entertainment options. Unemployment is historically low, job openings are high, and wages are rising. Female labor-force participation is close to 60 percent, slightly below historical highs, and more people go to college than ever before to signal that they have the intelligence, discipline, and skills to earn high incomes. 

Tomorrow, I could book a flight to over 100 countries to see wondrous natural and man-made sights. There are thousands of good restaurants and bars within an hour’s drive. I could never hope to sample fully the range of tasty cuisine and alcoholic beverages available to me. The internet is at my fingertips, with billions of interesting articles, tweets, and videos that could fill my day. The number and quality of new books that I can download is difficult to even describe. Shooting ranges (I’m an American, after all), axe throwing, cigar lounges, rock climbing, and various novel and new exercise classes at gyms are close by—to say nothing of activities I’m not even aware of yet. And I have numerous friends and many potential friends who are just a phone call or text away. Streaming services bring the golden age of television and movies into my household. And the list goes on.

These and other options mean that every choice we make has a high opportunity cost regarding our careers and entertainment options. When countries develop, fertility falls for this and other reasons. New immigrants drop their fertility because the opportunity cost of raising children is higher in a country with enormous economic opportunities, high incomes, and vast cheap entertainment possibilities. 

But the effect isn't limited to immigrants; it also crushes fertility for native-born Americans. Despite the nostalgianomics of Robert Reich and Josh Hawley, two-income households aren’t vastly more common than they used to be because of a brutal Malthusian competition for increasingly scarce resources. Women work because their wages are so much higher than they used to be. There isn’t a two-income trap—there’s expanded female economic opportunity, and this opportunity cost is contributing mightily to the decline in fertility.

Economists are generally loath to ask people why they make the decisions they do (except for the venerable late and great Ronald Coase), but so are those who are most worried about the decline in fertility. Or they could just watch the latest internet sensation of two DINKs (dual income, no kids) explaining all the things they do instead of having kids. It’s hard to explain the benefits of children to people who don’t have them, but it’s easy to describe the opportunity cost. I used to roll my eyes when people said, “Having kids is the best thing I ever did, and my kids are my life,” but then I realized how true it is. The insights of evolution make it painfully obvious. 

After I had my first child, I described to a philosophy PhD friend how my new feelings revealed the poverty of the English language. My deep feelings for my children deserve a word other than love, which we use to describe feelings for our spouse or an excellent movie, and I never felt that before learning that my wife was pregnant and seeing my son for the first time. I think I would lay down my life to protect my wife—I certainly hope I would if it ever came to it. My wife has said the same to me. But after we had our son, we had a frank conversation about it. I said, “I think I’d sacrifice my life for you, and I’d want to, but there might be a moment of hesitation. But I have zero hesitation to lay down my life to protect our son.” I acquired a love and empathy that I had never experienced before. She agreed on both counts. My philosopher friend said that it sounded like having children was a “consciousness-expanding experience,” which was a great way to put it.

It’s hard to convey those intense feelings to people who don’t have children. We see people putting themselves in dangerous and extreme situations to save their children all the time, and it’s not surprising that they do so. We notice when people put themselves in similar situations to save people they aren't related to because it’s so uncommon. But the costs of having children are obvious, understandable, and relatable to other costs that people incur—especially the opportunity costs. Having children is exhausting initially (it gets much better, trust me). Waking up every three hours for a feeding is painful, and you really don’t realize how bad it is until you get a six-hour block of sleep weeks or months after the baby is born.

Forget About Overpopulation, Soon There Will Be Too Few Humans
The more people there are, the more solutions to problems will be found.

Everybody knows that newborns are exhausting, and, more importantly, they know what it feels like to be exhausted before having a baby. People also know that having a child changes your life. It’s more difficult to have a beer with colleagues after work, go on that important work trip to seal a deal, or take the high-stress long-hours job that pays more, especially for women. It’s harder to see your friends on a whim, take vacations to fascinating places, or try new activities that take preparation and skill. Just try learning how to rock-climb with a baby.

I'm not arguing that people should refrain from having children. I’m merely setting out the benefits and costs. My wife and I have three children, and I want to have more, but my wife is reasonably more reluctant. She has chosen jobs that offer flexibility and predictability rather than higher paying and more demanding jobs. She no doubt has sacrificed income as a result. I'm proud of her for having a rewarding career and three children because it’s a testament to her intelligence, foresight, energy, and organizational skills that she can make it work. She also knows that having another child could entirely knock her out of the labor force. We estimate that purely from lost income, it has cost her (and our household) about $350,000 to have children so far, not including the lost capital gains. Having another one could bump that to about $2 million if she stops working for some years. 

On the entertainment side, my wife makes the lucid point that more children mean we can’t go on as many or as interesting vacations. This doesn’t bother me because I dislike traveling, but she enjoys it. Even traveling across the country to see our families is significantly more costly and difficult with children, and we certainly are constrained from doing it impulsively. We see our friends less, eat out much less, travel less, try fewer new things, and generally experience the wider world less because we have children. It takes only a moment’s reflection to realize that she and our household are paying an enormous cost for our fertility. It’s worth it, and almost all people think the benefits exceed the costs, but the cost is very high and rising.

The DINKs video is enraging to people worried about the decline in fertility, but you must be blind to ignore its coherent argument about the opportunity cost of having children. The bad news is that the fixed cost, or overhead, of having children in terms of opportunity cost is high. Having a child changes your life dramatically and makes the costs I describe obvious. But the good news is that the marginal cost, or the cost of having more than one, is much lower. The total cost rises with more children, probably to a point, but the cost of going from one to two is much lower than going from zero to one. Just witness how much more relaxed and less anxious people are when they have their second child compared to the first. And the third is a breeze. Hopefully, I will find out that the fourth is also easy. 

This brings me back to my comments in the green room at Fox. Immigrant fertility rapidly falls because immigrants, especially women, have significantly more economic opportunity in the United States, so they make the choice to have fewer children and work to make more money. People who are very concerned about the fertility crisis and want to reverse it should be the most interested in understanding the causes of the decline in the first place. This is why I find the vague “cultural” arguments that people raise for not having children so frustrating. Culture is the set of human actions that evolved to partially deal with the problems of the past and to harness opportunities. Culture is not some magical force outside of economics, politics, or technology but a set of human actions affected by economics, politics, and technology. Culture, in turn, affects economics, politics, and technology. To argue for changing the “culture” without changing the rest is simply unserious. 

Culture isn’t irrelevant, but cultural practices often emerge from changes wrought by economics, politics, technology, or elsewhere. Cultural attitudes matter considerably, and many intangibles, such as the approval of strangers, local mores, and religious belief all greatly influence individual fertility choices. People make decisions for myriad, complex reasons that are poorly understood. Often, people have aesthetic preferences that they act upon. Analyzing opportunity cost can’t explain everything, but it is an ignored or often ridiculed partial explanation that deserves serious consideration.

Conservatives and traditionalists on Twitter attempted to shame the DINKs video. I write “attempted” because the shamers will fail to change cultural norms by scorning people whose behavior they dislike. Shaming works if most people also disapprove of the targets, but most people don’t disapprove of a child-free life because the opportunity-cost is just too high, as the young couple in the DINKs video were at pains to emphasize (albeit in less sophisticated economics terms). 

Those who write about cultural reasons for fertility will deserve to be taken seriously when they can point to widespread changing behaviors and hypothesize about why they changed. People who blame (or credit) a changed culture of increased sexual promiscuity on the development of cheap and effective prophylactics, birth control pills, and abortion are serious thinkers. Those technologies, where available, rapidly changed cultural practices and norms. I disagree with social conservatives who want to ban or restrict birth control and condoms to roll back widespread sexual promiscuity, but at least they understand that the cultural behavior they dislike is downstream of economics and technology. One can recognize serious thinkers even when disagreeing with their conclusions.

Punitive marginal tax rates on the second earner in a household would knock many women (and some men) out of the labor force by lowering the opportunity cost of having children because there’d be no career to give up. Further, it would be an awful policy with numerous bad unintended consequences—even on other issues that conservatives care about, like family formation and the diminution of individual rights in service of collectivist goals. There are other ways to reduce the cost of having children, mainly through deregulation.

The DINKs video isn’t shaping culture, it’s a cultural response to the fact that it’s never been more expensive to have children when all the costs are considered. Until natalists acknowledge that, they’ll just be screaming into the void.

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