Demographics are Destiny...

Well not exactly, but there is truth in this.  It takes a fertility rate of 2.1 children per woman to hold a country’s population steady. The U.S. had been at this number but recently has fallen back (see chart below). The number of children American women hope to have and what they achieve is drifting apart. Marriage is getting postponed and unmarried births are falling (which incidentally is a great thing!). If immigration does not increase we may be facing economic problems. Like government revenues falling and Social Security getting more difficult to pay for.

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This is nothing new for countries like Korea and Japan. Births in Korea, for instance, are running at about one child per woman. And many Asian countries are resistant to immigration which compounds the problem. China is also facing issues. The one child policy has been scrapped but urban families are reluctant to have a second child due to child rearing costs.

The National Bureau of Economic Research looks at birth rates and economic growth, and since 1990 a slowdown in the birth rate has always preceded a slowdown in the economy. Will we see a recession now? We might, but there have also been false positives where a decline in the birth rate did not lead to a drop in the economy. Nothing is simple!

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And the fertility rate can turn around. Earlier this decade Russia was expected to see a sharp fall in its population due to alcohol deaths and a low birth rate. But birth rates have rebounded recently.

We will definitely be rooting for an uptick in birth rates in the U.S. now. Time to change the mantra from, “Make America Great Again” to, “Make Sex Great Again!”