The world is slowly waking up to the fertility crisis. There is more acknowledgement of the problem, and there is more talk of potential practical solutions. I do not believe the topic is a realistic target for Balsa Policy Institute, but I will continue to keep an eye on the ball and issue periodic roundups like this one.

In Brief

A basic problem is that we do not consider infertility a big deal for things such as DALYs. Many would strongly disagree.

Fertility clinics that get new corporate ownership by a fertility chain have 28.2% increased clinic volume and 13.6% higher success rates, dramatically improving overall outcomes.

Mishra has the fertility take on Barbie.

Mishra: Weirdly this is a take I haven’t seen anywhere but to me the point of Barbie is that the most important thing is kids and everything else is meaningless without them.

Barbie is discontent because her life of leisure and partying and hanging out with cool people isn’t going anywhere, her happy ending is going to the gynecologist i.e. gaining the ability to reproduce.

Barbies in general exist to make kids happy and secondarily to “better them” by providing examples of lives you can lead as empowered women. The point of them is pointless without children and yet their lives are structured around childlessness.

Ken is inherently discontent because in there’s no point to him. He wants to be needed by barbie but since she needs neither reproduction nor defense nor labor, he’s just eye candy, an occasional pleasant distraction… who unfortunately has desires of his own.

Causes

New article says (HT Robin Hanson):

Fertility declines over the last decade mean that the previous suggestion that very high levels of development and gender equality foster fertility increases is no longer supported on the national level.

I always found the claims to the contrary bizarre. It seems obvious that greater development and gender equality are associated with and cause lower fertility. Good things can have negative consequences.

This paper examines how the structure of modernity could be leading to low fertility.

Abstract:

Low fertility is a growing concern in modern societies. While economic and structural explanations of reproductive hindrances have been informative to some extent, they do not address the fundamental motives that underlie reproductive decisions and are inadequate to explain why East Asian countries, in particular, have such low fertility rates.

The current paper advances a novel account of low fertility in modern contexts by describing how modern environments produce a mismatch between our evolved mechanisms and the inputs they were designed to process, leading to preoccupations with social status that get in the way of mating and reproductive outcomes. We also utilize developed East Asian countries as a case study to further highlight how culture may interact with modern features to produce ultralow fertility, sometimes to the extent that people may give up on parenthood or even mating altogether.

Through our analysis, we integrate several lines of separate research, elucidate the fundamental dynamics that drive trade-offs between social status and reproductive effort, add to the growing literature on evolutionary mismatch, and provide an improved account of low fertility in modern contexts.

The theory is that modern life creates an evolutionary mismatch, similar to the way we like fats and sugars, that drives focus on social status at the expense of reproduction. In this model, people evolved to value comparisons with others, so making everyone far wealthier did not alter people’s self-perception of their own wealth and position, whereas having access to more comparisons with more high status people around the world lowers it and raises social status related monitoring and action costs. Similarly, by offering more ability to invest in social status, and giving us a more crowded group to compete within, that competition becomes more competitive, forcing more investment by all involved.

One could also model this theory (this paragraph is me not the study) as saying that there will always be a substantial number of people who are below threshold in relative social status, which will trigger them to consider delaying fertility, which is now feasible for them to do. If those above threshold do not then have large families to compensate, we won’t get back to replacement levels, but it is now very expensive and rare to have such very large (4+ child) families.

Very few people want such families now, this is from a dating group analysis:

We can deal with the 0s and 1s, but to do so we need more 4s and 5s.

What happened to cause declining fertility in France in the 1700s? Data from different areas of France strongly supports hypothesis that this was about secularization, which was in large part a tax revolt and reaction to state corruption. Thread was fascinating.

Claim that hours worked could be a big factor.

More Births: Why do countries like Poland and Greece have much lower fertility than places like Germany and Scandinavia despite being a lot more religious? Why is Northern Europe more fertile than Southern Europe? Differences in time spent working may help explain this. New map by @landgeist.

Some stark contrasts here. As commentors note, in the past we had very long work weeks and very high birth rates. My guess is that it is the combination of hours worked with huge expected time investments in childcare, and modern isolation of the nuclear family, and that this is indeed making this dynamic important, although one factor among many. Note that due to Greece’s informal economy, its number should be taken with generous amounts of sea salt.

What if rather than (or in addition to) hours worked at the job, it was hours worked with the kids going nuts?

1. The intensive parenting revolution is not remotely an American-specific phenomenon. It’s happening ~everywhere across Europe

2. Are French mothers the only parent category in the OECD spending less time with their kids than they did 60 years ago?

Yes, the bottom of these graphs is the zero point. These changes are insanely big.

One of these graphs is not like the others. Viva la France. No wonder French fertility is holding up much better than that of many other European nations, although not well enough.

Does this lack of time spent hurt outcomes? I have not heard any claims that it did, and French relative performance on metrics seems stable, full Null Hypothesis Watch. All GPT-4 could come up with was France lagging in mental health diagnoses like ADHD in children, which is part of the same package and for which I say ‘good,’ and claims that France is seeing widening educational outcome inequality between socio-economic groups, which I presume is due to other problems they are facing that are beyond scope here.

Maternal deaths and medical issues are on the rise, which is terrible for its own sake and no doubt discourages fertility. Thread blames this on declining overall heath. There’s also the issues with unnecessary pressure for C-sections and other unwillingness to treat mothers as humans during births.

Causes: Pessimism

David Friedman highlights our extreme pessimism about the future, which I agree is a neglected and important part of the puzzle. While the world is lifted out of extreme poverty and life gets vastly better, instead people see the world as getting worse now and into the future. People move from worrying about overpopulation and mass starvation to expecting dystopian political dangers and climate change, with the newest such danger being AI.

The post frames all these risks as being overblown similarly to previous worries about overpopulation. I think that is overstated, but directionally correct – people incorrectly (given their concern is rarely smarter-than-human AI) despair over the future generally, and they (less obviously incorrectly) despair over their future in particular. They ask, ‘why would I bring a child into this world?’ as if that would be a bad thing for the child.

David Friedman does not mention pessimism on economic and affordability concerns, especially the rising costs of housing, health care, child care and education, that make young people think they cannot afford children. Probably because those problems are very real, so the problem is not pessimism. I would instead say the problems are both real, and also causing additional problems via pessimism.

Climate change is especially dangerous here, since having a child is seen as making the climate situation actively worse.

In the context of fertility, there are two ways to address such concerns, from the existential to the political to the economic.

1. One can try to convince people that their concerns are a mix of incorrect and overblown. Tell them the Good News, give them the white pill that the world is actually getting better and all these problems are eminently solvable and that we will solve them.
2. Actually solve the problems, in a way people cannot miss, and feel in their bones.

I strive to do my part with approach one. It is definitely worth doing some of approach one.

The better approach is approach two. The pessimism is unjustified but the problems are real. And our problems are so eminently solvable that solving them is not obviously harder than the rhetorical solution.

I think this fully applies to climate change in particular. We have the technology and the ability. The things that actually would work are not expensive and do not require large sacrifice, if we focused on what would actually work. We should totally do that, even without factoring in the rather large value of protecting the climate, purely to mitigate the psychological fallout and the costs of various ineffective alternative interventions.

Causes: Escalating Signals

Robin Hanson offers the thesis that at the heart of all this are escalating signals.

We demand that children receive far more attention than they ever got in the past, threatening not only shame and implications of not loving your children, but calls to police and social services. This covers both active attention and activities, and never leaving the children unsupervised for a moment even at home, let alone letting them play. That hurts fertility a lot.

There is a need to get increasingly many years of schooling, and the increasing penalties for interrupting those years and the lack of slack within those years. That also hurts fertility a lot.

We tell young people to ‘find themselves’ and finish one’s own journey before finding a mate or starting a family. We did not used to do that. Before we used to partner up and marry early, then grow and figure out who we were and adapt to life together. Instead, we look down upon such folks now as basic and no fun, and see marriage as the end of our journey rather than the beginning. Many in the lower classes consider marriage so high a bar that it is now a far higher bar than having a child with someone. This greatly hurts fertility.

We used to think it was good and right to get grandparents and other relatively to offer lots of help raising children. Now, Hanson claims,, we look down on all involved in such arrangements. I’m not sure we actually do on this one, but it is true that such help tends to be far less prioritized or forthcoming, including because grandparents are now too old and lack the energy.

We are more likely to live in and value living in urban areas, which have always had lower and often below-replacement fertility. Health care spending crowds out other spending.

The Baby Boom

Hanson mentions lack of wars as well, citing it as a source of baby booms, but as was written about recently in Works in Progress by Anvar Sarygulov & Phoebe Arslanagic-Wakefield, the timing and details of the baby boom rule out World War 2 as the cause.

The baby boom began in the 1930s, before the war. The boom happened around the world, including in places that were neutral in the war such as Ireland and Switzerland. Something else was going on.

The thesis proposed is a combination of other factors:

1. Electric power, refrigerators, stoves, vacuums and washing machines.
2. Massive declines in maternal mortality due to medical improvements.
3. Housing boom that led to rising homeownership.

Together these are a huge game. Raising a child meant far less risk of death, a much more manageable home life and a much more affordable home in which to raise those kids. As is usually the case, dramatically lowering the price led to large increases in supply.

Add in the effects of the war effort, with men seen more favorably and maturing faster, and you get lots of young marriages and lots of kids. More births has a thread putting the spotlight on the earlier marriages and the impact of the war.

Then over time the cost to raise children went up in various ways, and the effect went away and reversed itself.

I essentially buy this argument, plus the cultural trends building on themselves.

Can we use the magnitude of the changes to estimate impacts? I hope someone tries. In this case it seems super hard, since there are so many different factors. Perhaps there are natural experiments where improvements were uneven and we can do difference-in-differences, but someone else will have to do that research.

Until then, the broad lesson is that you can indeed vastly increase the birth rate via shifts in the lifestyle and economic implications of having children. All you need to do is an improvement on the order of affordable housing, vastly decreased death rates, electric power, refrigerators, vacuums and washing machines.

When you put it that way, it sounds like a lot, an AI-complete assignment. Perhaps, but I think we have imposed such massive unnecessary costs that we could indeed get similarly dramatic improvements if we put our minds to it. That’s still a huge if.

Maternal health has actively gotten worse recently.

We saw continued improvement through the baby boom until 1987, then it reversed, although the Covid pump is hopefully temporary. The issue is that women are in worse health and suffering from various complications due to that. There still isn’t that much room left for improvement, the best you can do is zero.

You’ll Need More

This graph would suggest that indeed the big change in America at least until 1958 birth cohort was in less 4+ child families, rather than more people having zero children.

The authors propose that East Asian fertility is so extremely low because they have a culture of patience, hard work and social status investment beyond that of those in the West, causing them to postpone and forgo fertility even more than we have. Low prestige jobs or shortened educations are not considered options by most people, making competition evermore fierce. They then move on to discuss materialism.

The problem is that they do not, as Tyler Cowen would say, ‘model this,’ or think like economists. Instead they tell a Just So Story. That story could well be pointing to a substantial piece of the puzzle, but we have not been offered a new way to know whether or not this is true beyond our intuitions.

In Palladium Magazine, Simone and Malcom Collins make the same point. Many families and individuals will have one child or no children at all. The only way to maintain the birth rate at replacement level is for a lot of families to have four or more kids to make up for that. The economics of doing this have become prohibitive and the culture disapproving of it.

The solution offered is to create microcultures, groups that can embrace having lots of children, with gains compounding quickly over generations. I do not think this is sustainable, there will be too much cultural leakage without extreme (as in Amish level) measures to prevent it, we need to do something overall, although I have more hope for abundance than they do – they notice that around $500k in income we get replacement level fertility, and if we have both (non-transformational but economically very powerful) AI and a shrinking population, getting to that level of effective wealth seems doable, aided by a presumed fall in housing costs via lower demand that overcomes building restrictions. I also hold out more hope that ordinary and reasonable economic transfers can work, they have not yet been tried in quantities that might work.

Lior Lefineder’s thread also has several other graphs. Here is a pretty amazing one:

Now that is a transformational 40 years. You go from 35% of children not surviving down to under 20%.

One reason to have more is to ensure your legacy, that your line survives at all. This was especially true back in the day when child mortality was much higher. If there is more uncertainty, you need a higher mean result to insure against catastrophe.

Marko Jukic: I think the real replacement fertility rate is not 2.1 kids per woman. It’s 5.1 kids. A recent Swedish study found that in a generation born 1885-1899, an incredible 25% of people who had 2 kids had *zero* descendants by 2007! For 1 kid? 50%.

The 2.1 number seems intuitive and is taken as moral or life advice. Two is good enough to sustain populations. More would dilute investment in each child or cause overpopulation. But it is actually just a statistical artifact that varies considerably based on mortality.

Suppose you aren’t interested in playing your small part in statistically replenishing an entire population to the next generation, but rather interested in replenishing your own family dynasty or lineage over the long-term. What’s the real replacement fertility rate then?

Early 20th century Sweden saw falling child mortality and avoided the World Wars. Yet a full 25% of parents with two kids still saw their lineages die out within a century. This is replacement over the short-term, but doesn’t sound like replacement over the long-term.

According to the study, the probability of no descendants after ~120 years reaches near-zero not at 2 or even 3 kids, but rather at about *5 kids.* So if you were an adult in early 20th century Sweden who wanted great-grandchildren, you should’ve aimed for five kids, not two.

…

You can control your own fertility. But you can’t control *your children’s,* let alone grandchildren’s. In 2023, they may still die before reproducing or decide not to reproduce at all. These in fact aren’t negligible chances, but uncomfortably large ones that pile up quickly.

Samo Burja: A difference in perspective when you start thinking of your own family or dynasty as contributing something unique. Having children to help society make social security payments or ha max GDP is one thing. Having them to perpetuate a mission or special knowledge quite another!

Having five children only works if your progeny sustain 2.1 children or more in the long term. If they sustain higher than that, and you survive 100 years, you’ll survive 1,000 years unless there is some systematic catastrophe or extinction event like AGI, or historically often something more pedestrian like an invasion. Jews remember well that in every generation they try to kill us.

From a societal perspective, 5.1 kids is far more than the average we need, enough so to cause the opposite type of crisis rather quickly. What we actually need is for there to be a subgroup that cares enough to target numbers like 5.1, to make up for those who do not aim for, or fail to hit, the 2.1.

I’ll Tell You What I Want What I Really Really Want

Mason says it out loud.

Mason: If I’d never had my baby girl, my life would have been half-lived. I would have been incomplete until my death. That may not be the case for every man and woman, but it’s absolutely true for me and I suspect most other people.

Normie MacDonald: It’s unfortunate that this is so difficult to communicate to people who don’t have kids

Mason: Young people are bombarded with the idea that there is something wrong with their mental health or personality if they don’t feel fundamentally whole and satisfied walking through life alone, even that they shouldn’t date or commit to anyone until they’ve achieved that.

That might be developmentally appropriate in a person’s teens and early twenties, but I think it’s perfectly natural for a person to intuit some emptiness as they grow into an adult who isn’t on a path toward making a family.

I affirm that this is not going to be the case for everyone, but I believe it is true far more often than those giving up on having children realize.

What happens to lottery winners? A paper claims that male winners have increased marriage formation, reduced divorce risk and increased fertility. That all makes sense. What is more interesting is that this didn’t happen for women, who only got an increase in short-run (but not long-run) divorce risk (the ‘I’m not stuck with you anymore’ effect, presumably). Women did not respond to a wealth shock by having more children, or forming more new marriages.

This suggests that when women say that they need a better financial position in order to be ready to get married or have children, they often instead mean they want proof of higher mate quality rather than that they are concerned by a lack of resources.

The results also have obvious implications for work incentives and pay inequality, and also for fertility. If the lottery is in some ways representative of a wealth or income effect, the incentives here seem highly asymmetrical.

Negative Dakka

South Korea increasingly bans children in a wide variety of places, including libraries.

Yong Hyein: In order to boost our birthrate that is the world’s lowest, we should first change our society that rejects children. Children are our fellow citizens who learn about the world for the first time, so they can be slow, clumsy, or inexperienced in everything.

But all of us are, or were once children…The society we want is not one that is only made for people who are quick, skillful, and experienced – but one where it’s okay to be slow, clumsy, or inexperienced.

Quite so. It is easy to see why a private venue might prefer to exclude children, especially once there were so few children left. It is also easy to see why this is harmful to society, both to the birth rate and to the lives of children, parents and families, and to who those children will grow up to be.

This negative externality is important. At minimum, private venues that exclude children should be taxed. In some cases, where the required tax would be too high, an outright ban on such restrictions is appropriate.

Not Enough Dakka

Chinese fertility rate drops in 2022 to 1.09. A month later, they followed up that Chinese births declined 10% year over year to only 9.56 million, out of a population of 1.4 billion.

China continues its efforts to throw (moderate amounts of) money at its fertility problems. The Chinese city of Hangzhou, for example, is giving $2,900 grants to parents who welcome a third child this year. Other cities are giving 30 days of ‘marriage leave.’

As usual, there is talk of ‘it’ll likely take more than monetary incentives to get people to have kids’ to which my response is to quote back: If brute force doesn’t solve your problem, you are not using enough.

An interesting contrast can be drawn with Tracy Alloway’s principle that ‘any problem that can be solved with money isn’t really a problem.’

My reconciliation of those two is that simply because money would solve your problem does not mean that you will be allowed to spend that money.

The linked story’s central case is China’s crackdown on betrothal gifts, as the custom of paying a ‘bride price’ is sufficiently out of hand as to be a substantial barrier to marriages, sometimes costing multiples of yearly income or even including real estate. The money is traditionally paid to the in-laws rather than the new couple, so there isn’t a strong offsetting positive effect.

China’s problem is that there is little underlying demand. In America and many other places, desired fertility is comfortably above replacement, so a combination of financial, logistical and social help should be within reach. In China, not so much.

Lyman Stone: Only 38% of Chinese college students want to EVER have children. 34% among women. Guessing at true desires of “uncertain” respondents, average Chinese college women desires just 0.94 kids. College men 1.05. Chinese pronatalism will fail.

The only paths forward for China are either:

1) Cope– very very hard given China’s constellation of finance, local government, welfare, and migration policies

2) Coerce– BIG YIKES, but they may try it

3) Convince– they aren’t even trying this yet

It’ll be interesting to see if China attempts any big “cultural interventions” aimed at shifting desired family size and the social prestige attendant on parenthood and large families. So far they haven’t even gestured in that direction.

China’s whole shift so far has been 1) rolling back prior punitive anti-natalism 2) assuming voluntary incentives will unleash higher desired fertility like in Western countries. But Chinese people genuinely don’t want big families in most surveys!

Recent surveys of Chinese fertility preferences give estimates between 0.9 and 1.7– these are the lowest surveyed preferences found anywhere in the world folks. The kind of pronatalism I espouse is DOA in the Chinese context.

The endgame is presumably a mix of all three strategies.

Cope is needed since the other two will at best only mitigate the population collapse.

Convince alone won’t work. Persuasion only goes so far before crossing into coercion.

Nor will bribery. As the OP says, in America people want to have enough kids to fix the problem, in China they do not, making the amounts of money required vastly larger.

Coerce is a matter of degree, with no clear line where financial and social incentives, both rewards and punishments, transform into coercion. Big enough bribery, paid for by everyone else, is not fully non-coercive. Nor is Chinese-style ‘persuasion’ non-coercive. I can imagine a future world in which expressing anti-natalist views on WeChat will get you into trouble. The question is, are they willing to go far enough, and what would it look like if they did?

South Koreans similarly lament that there are big plans to boost fertility floated every election, but when people do not want children money only goes so far, and blame societal issues.

Certainly societal issues are a big deal. As I’ve noted before, South Korean television paints a deeply dystopian picture where no one has any slack to think of having a family.

Yet what are the policies that have failed? A monthly child allowance of more than $500, soon to be $750, and 18 months of subsidized leave. I realize that this is over $210 billion in the last decade but South Korean GDP is 1.81 trillion. That is on the order of 0.1% of GDP, for a national existential crisis that seems like giving up far too early. Or alternatively, South Korea has a population of 51.74 million, so this is about $400 per year per person, most of which is transferred rather than lost, and most of it not given lump sum at birth or otherwise well-targeted. This is a start. It is not what trying for real and failing looks like, and is highly dwarfed in size by (for example) America’s funding for public schools.

Back home, I agree with Arnold Kling that the diagnosis of this Michael Lind post is good, that we are making it economically and logistically too difficult to have children and we should address this, and also agree that the proposals involved won’t get the job done. Heavier ammunition will be needed.

In Reason Magazine, Elizabeth Brown argues that government intervention to increase fertility (unlike intervention to decrease it) is toothless, advises that here is not much to be done other than immigration. Cites the failure of past attempts, which I continue to argue worked fine if you compare magnitude of spend to magnitude of effect. Does not mention the other interventions that seem most promising.

Sam Dumitiu points out that age of first child continues to rise, cites among other things housing prices, as a 2016 study says a 10 per cent increase in house prices leads to a 2.8 increase in births among owners and a 4.9 per cent decrease in births among renters, a net 1.3 per cent fall in birth rates.

I always love such statistics because they let us play our favorite pro-natalist game, which is how much would it take?

So, based on this information, and a brief search suggesting an average house price back then was about $316k for all houses and more like $200k for first time buyers, and we assume the gap between owning and not owning as an endowment effect of 10% of that and split the difference, let’s say an unconditional endowment – not even an incentive, only an endowment – of $25k led to a 7.7% (!?!) relative increase in births.

So the answer is really not very much, since you would presumably get a much better return on a direct payment than you would on an unconditional wealth transfer.

Perhaps for political economy reasons this could take the form of a homebuyer subsidy available to new parents (first-time would be the default, but if possible we would want it to include existing owners who are upgrading for more space), where we cover $25k of the down payment. That might be very well-targeted at exactly the couples most likely to be impacted, the ones who want to buy a place to start a family and can’t afford to do that.

Robin Hanson went over various considerations, excepts nations to be unwilling to deploy sufficient quantities of Dakka, but upon deeper analysis he realized his post was wrong. At the time, he expected nations to be unwilling to pay. Now he thinks there are ways to make payments work. Ultimately, it will come down to price, so that’s the real question.

The place I most disagree is that Hanson envisions endowing children with debt owed to their parents, as a means of tempting people to have children. This completely misunderstands the mind of people considering having children. It would do me exactly zero good to be able to endow my children with debt to me. I work hard so my children can have a better future, not so I can steal part of theirs for myself.

Robin later suggested using personal tax assets to provide fertility incentives. I expect this to be ineffective, as it does not address the constraints facing families, and would not seem sufficiently credible, but my main disagreements lie with the broader tax asset plan and are beyond scope here.

How much Dakka are we interested in deploying?

Whether or not to include school makes this confusing. If public school counts then that already puts us over $100k, I doubt most people in the survey were responding that they wanted parents to foot that bill. If we presume that this number excludes school, then we still don’t have much support, even among Hanson poll voters. This level of support won’t get the full job done, but it would be a damn good start.

More Dakka

A Texas Republican who is in the habit of introducing random bills with no co-sponsors introduced a bill with no co-sponsors giving families large property tax cuts based on how many children they have, at the rate of 10% discount per child. I found this out because of a Democratic strategist highlighting that it only applied to straight married couples neither of whom has ever been divorced, and comparing it to famous property tax allegory The Handmaid’s Tale.

Needless to say, the implementation details here are not The Way to align incentives, or provide families in need with necessary help, and are needlessly controlling and cruel. Which doubtless was intentional. This wasn’t a real bill intended to pass.

If you want to do this, give parents money. If you worry about incentives to work or that you’re going to overly reward the poor or something, an income tax break makes sense, except Texas has no state income tax. Property tax discounts are simply weird here, if your property tax bill is so big that 10% of it is a game changer, I guess a few farmers might be in that situation but it’s still super weird.

Also, it is interesting to game out the bill as written. If having more children reduces your property tax rates, then that means that there is reason to ensure that those with more children legally own more real estate. Given how one can lease, and issue debt, and sign long term contracts, if such a thing were to pass, I’d expect High Weirdness.

The Check Republic increased its subsidies, and got some results.

Astral Codex Ten Commenter <0174: I’m Czech. With a kid. The subsidies are quite high, but not as much as you state – it is currently $13k in total, for most people this is split into three years (so $360 per month). This typically adds around 1/4th of one person’s average salary (the woman, sometimes also the man, typically doesn’t work until the child is 3 years old or does only part-time). This really leads to speculations that poor people have children just for the sake of this benefit, but of course this is difficult to prove.

The amount was increased substantially from $9500 in 2020, but the increase is gradual so I don’t think this is the main reason.

As for the data itself, I suspected some change of methodology, but it seems it is legit. See this graph of the Czech statistical office (“Graf 19”, PDF page 33, black line)

Czech sources mention as the main reason for the increasing numbers were stable economy and the increase of the subsidies (plus some changes in the way they are paid).

By the way, for 2022 the numbers are back to 1.66, reportedly mainly because of covid and they are expected to go down because of the Ukraine war and economy stagnation.

This represents a standard economic model of fertility. People want kids. Kids cost money. They have more kids when the price goes down, and they have more kids when the future looks brighter and they feel more able to afford them and give them good lives. There is obvious concern that fixed-size subsidies increase birth rates more among the poor, which we could fix by having part of the subsidy be reduced marginal income tax rates if we cared enough (and could be made non-regressive or even progressive, if desired, by changing baseline rates).

The Czech decline in birth rates was very large, as was the size of the recent recovery, relative to obvious comparison countries. They had a lower low point, and are now substantially higher than their neighbors, although very far from the 2.1 target. Of the about 0.5 jump in fertility, we can roughly say that 0.25 of that is recovery from an abnormal low and general continent-wide provisions, and attribute roughly 0.25 to uniquely Czech influences. If we attributed this entirely to ~$10k subsidies per birth we would get $66k per additional birth. If we scaled that with wealth the implied marginal cost per birth in America would be about $185k, likely an underestimate since there are likely some other factors also in play here.

Cato Brings the Fire

Cato has a new guide to increasing fertility in America.

Their first claim is that direct fertility initiatives, presumably direct payments, are estimated as costing $250 billion annually to raise the fertility rate by 0.2 children per woman, or about 450,000 births a year. That would be about $555k per birth. They do not directly say where this comes from, but later they do explain it:

Although the effect size of fertility initiatives is often small and they typically fail to achieve their goals, these policies frequently come at a large fiscal cost. According to an estimate by economists Melissa Kearney and Phillip Levine, $250 billion in annual childhood spending—between seven and eight times the amount of childcare spending that the Biden administration proposed in Build Back Better—would raise the total fertility rate from 1.6 to 1.8, an increase of just 0.2 extra children per woman.²⁰

Taken at face value, that is 457k live births per year at a cost of 250 billion, or $547k per additional birth, or for an 0.2 boost in TFR about $60k per child born in America, in transfers.

This is likely to be a highly inefficient transfer if the only goal is raising fertility. Direct payments or other help that is directly accessible at or before birth have a much stronger impact than continuous future benefits over time. Benefits given in the form of subsidized child care will largely be captured by the industry, or from the additional costs imposed upon it such as requiring college degrees and ground floor facilities. Much of the time, those using the subsidized child care would much rather put the children with family or watch them themselves, if they could keep even a fraction of the subsidy.

In my post On Car Seats as Contraception, I estimated the cost even via an inefficient mechanism at $270k, similar to the cost of raising a child to the age of 18, so we disagree by a factor of two there. Then in Fertility Roundup #1 I found lower estimates from elsewhere, including $17k in Australia, $65k in Sweden and $75k in Singapore.

Cato sights a Quebec policy that had a huge short term effect at $9k per additional birth, but claims long term birth rates were mostly unaffected. They point out that all countries except Bulgaria that set explicit fertility targets failed to hit their goals, but I would point out that mostly the attempts were extremely underpowered and Russia’s efforts did make substantial progress. And also you should see the other guys.

How much would it take here with the direct approach? Eliezer Yudkowsky tests the waters.

The issue is that it is not so easy to well-target the subsidy. You don’t know which children happen because of the subsidy and which don’t, wasting the rest of the payment.

What this does say is that if you used a $50,000 subsidy for each child, in an unusually affluent group, you’d increase fertility by 0.185 for the first child added, which would put the upper bound estimate at around $450k per birth, already lower than $555k. Presumably then many of those same people would also add a second additional child, and some others would use the wealth endowment from current children to have another. In the general population the required value would doubtless be a lot lower, and the targeting can be improved. This is not obviously so different from my old $275k estimate right off the bat.

Similarly, it seems like a 50% discount on overly regulated and cost-inflated semi-mandatory child care benefits would if anything be too small an adjustment, and already gets us right back to $275k.

What could we afford to pay? If the payment were a pure deadweight loss, it would be a difficult lift to pay what I estimate Sweden or Singapore had to pay. The good news is, it is not a deadweight loss. It is a transfer from the childless to those with children. That transfer is not free and does generate some deadweight loss, but far less than 100% of size on the margin, especially if it is structured well. On the other hand, if the price tag is closer to $550k in transfers per additional birth, that could be prohibitive, although it is not obviously more prohibitive than not doing it, since the value is tranferred rather than lost.

The good news, Cato says, is we have more efficient paths we can explore. They say that government ‘should not put its thumb’ on the decisions families make when deciding on having children, but that it currently places that thumb on the wrong side and can stop doing this. I would instead say that the scale will not lie undisturbed in ways large and small, so we should indeed put our thumb on it while it is too far out of balance.

Why does Cato think the cost of direct payments would ultimately be so high? They think that the subsidy would largely be captured:

Although we oppose baby bonuses and other direct government payments to increase fertility as misguided attempts to raise and sustain fertility, enacting such policies without substantial deregulation along the lines we suggest would result in higher prices for goods and services demanded by parents. In other words, baby bonuses would be absorbed by higher prices instead of prompting an increase in the quantity supplied of those goods and services.

The result would not be higher fertility or greatly increased family consumption of the goods and services families demand. That is because regulations reduce the supply of goods and services and make the supply more inelastic, meaning that any increase in demand will not result in much increased quantity supplied of such goods and services.

This is a bold claim about the overall basket of goods and services demanded by families. Is that basket so dominated by regulatory burdens that it would effectively capture most of the gains from higher parental wealth?

We can draw a distinction here between places where the mechanism is explicit taxation of parental wealth, versus positional goods, versus other costs.

Colleges do this highly aggressively, often up to and including 100% marginal wealth and income taxes.

The biggest other good, by far, is child care. As I have noted before, our child care regulations are insane, imposing very large costs for minimal or non-existent gains. This is the white whale. Government daycare regulations and subsidies raise prices and then base what you actually pay on income, effectively creating very high tax rates once again. The need to arrange child care very much should be a non-zero disincentive to work, you are indeed incurring real costs to do so, but when costs are raised and then these huge marginal taxes are collected, this disincentive becomes far larger than is efficient.

Still, out‐​of‐​pocket childcare costs constitute about one‐​third of median female earnings in the United States, even after various existing tax and spending subsidies for childcare.

I will not belabor the details. Dramatic savings are available.

Then there are positional goods, especially housing and especially to the extent it is serving as a proxy of high quality public school access. Cato notes that housing is 26%-33% of child-raising expenses, although I presume that excludes the cost of time. As a percent of total family budget housing is even bigger than that. If you take the supply of housing and good school access as fixed, parents will use any additional funds to bid up on real estate, up until the point where going private at the same quality level isn’t more expensive. Same goes for if you are bidding to choose your neighbors.

I do think this is a big deal sometimes, but that most people have already lost the ‘good school’ sweepstakes and are taking whatever falls under the place they would live anyway, which means it’s a pure question of to what extent real estate is such a choke point it captures all welfare gains period. Which is more than most people think.

I continue to endorse the housing theory of everything. Certainly if I wanted to increase fertility efficiently, one would start with building more houses in the places people want to live and raise kids. Getting rid of inefficient zoning detail requirements, substantive up-zoning, actually approving construction, all the usual suspects.

How big an impact could this make? Rather large. Cato cites estimates of a 50% price increase in the most impacted areas like NYC and SF, and I agree it is at least about that high in such places, and also likely in many suburbs using exclusionary zoning. A good long term policy here could cut child raising expenses and overall household expenses from all sources by 5%-10%, once such policies have had time to play out. I notice I am confused about how much of that would happen how fast – you are bidding on implied rent which shouldn’t change until supply comes onboard but house prices should alter right away and thus things are weird.

What about the interaction with public school subsidizes? As Cato notes we pay $15k/student for public schools, but then force families to bid for good spots, effectively letting land owners recapture much of this (although they then often are the ones who support the schools via property taxes). Cato suggests, on top of general housing reform, allowing more choice of where students attend public school rather than strictly assigning houses to particular schools, or better yet allowing vouchers. They then cite the usual arguments for why competition is good.

If we were willing to mess with the sacred cow that is our system of location-based public schools, effective family expenses could drop dramatically, as could average quality of education available. The case for at least public school choice – essentially letting any child register at any non-magnet public school that has the capacity to accept them, if they can handle the transportation logistics – seems very strong to me, but also many good schools would quickly reach capacity, and I do think those nearby do need to retain priority. Still would do a lot of good in many cases.

The other big positional good is private school tuition, or college. I would presume that prices here would indeed increase somewhat, but also supply over time should be elastic, but then again it should already be elastic. Elite private schools sure look like they should be highly profitable businesses at current rates. My guess is that the very elite will get to collect a lot more rent, but where fertility is impacted competition will be more robust and increases would be modest.

Finally there are other goods. I agree that for example health care is subject to a lot of government regulation, but I would not anticipate that transfers from the childless to families would get captured here. They’d spend more on food and clothes and electronics and entertainment and durable goods and such, but they’d get more in return, that wouldn’t be captured.

Cato cites food as 18% of child expenses, and suggests ways to make food overall less costly, such as ending milk price subsidizes (especially important for families, I would also highlight sugar here) and allowing more visas for agricultural workers. There is no estimate made here of prospective size of impact.

Baby formula in particular, as we have all recently learned, is a regulatory fiasco even in normal times and was recently a crisis. Certainly we could make everyone’s life easier on this front by lifting restrictions, again impact size is tricky to estimate.

Remote work and flexible work, as Cato notes, are often godsends for parents. You can adapt to the needs of your children, including supervising them, while ensuring you still get the work done. The incompatibility of work and family is somewhat about the sheer total amount of hours in the day, but mostly it is that both are often highly inflexible, kids need things at fixed times and work demands your full professional attention at what one hopes are other times. Any overlap gets expensive quickly, so flexibility is king.

As Cato points out, many regulations work against this. I understand why regulations (the FLSA) prohibit compensating overtime with time off when I squint, but mostly this seems good and when applied to remote or fully flexible work it is a nightmare. Cato’s proposed solution, giving employers the ability to give employees the option, seems great.

More generally, the government and its regulations prioritize capital-J jobs and formalism, and discourage flexibility and getting things done. Health care being tied to jobs forces parents into patterns they may not want even more so than it does for others. Licensing and other requirements favor big business and interfere with gainful partial employment. Home business is especially frowned upon.

Next they mention unwanted C-sections, which can reduce fertility physically. The US rate of 31.8% is far higher than is medically necessary. Financial incentives and the convenience of the hospital push towards this happening. My wife experienced strong pressure on this front, luckily we were able to push back.

There is some discussion of reproductive technologies, where they wisely warn against distortive government interventions. There is still room for subsidy and for protection against interference.

Finally they turn to safety policies. They start with car seats. Classic. Then the most important one, reasonable independence, and the special case of home supervision. They note that in Illinois you cannot leave a child alone until the age of 14, and many places like New York leave it ambiguous which is not much better.

We are making progress. Several states have passed excellent free range kids laws. Connecticut until recently said that kids under 12 must under most circumstances be supervised continuously by an adult, and failure was criminal.

“If you had an 11-year-old who wanted to go three blocks down the street to play soccer at the local park with their also 11-year-old friend, if they were not under some sort of adult supervision, technically their parents could have been charged with a criminal offense,” Mair said.

The Department of Children and Families objected that otherwise, parents might decide what was best for their kids, but they are satisfied with the final version, which presumably does not do this.

Initially, DCF commissioner Vannessa Doranates expressed concerns, writing: “This leaves the discretion to determine what is or is not unsafe up to the parents, and provided they believe such activities do not present an obvious danger to their child it appears that the court could not decide otherwise.”

This seems highly disingenuous, that is obviously not how it would work. Instead, DCF would have to show that the actual decisions made were unreasonable.

The Cato writeup was a good overview, although I was disappointed that they failed to find new opportunity.

I’m Doing My Part

Matt Palmer suggests we act locally.

Matt Palmer: We must do everything in our power to ensure that our friends have a relatively easy time having babies Bring babies to parties, normalize free range children, give a bunch of parents a night off at once by organizing group babysitting events Many unimplemented wins here.

A great many of the proposed solutions to the problem of having a family (ie naive yimby claims that more housing magically solves birth rates (though it would help obviously)) are designed to require minimal effort on the part of people who don’t yet have kids.

This is BS.

Actual cultural change around family formation and size requires people who don’t yet have kids to make some changes in their behavior. Not huge ones, but at least some effort will be involved. You must proactively include people with kids in your social activities.

Btw I have selfish reasons for wanting this to exist, and soon. On the one hand, I’d like for more kid-friendly norms to be in place by the time I have kids, that’s the free bingo square. But I also still want to be able to spend time with my friends who have kids before I do.

I have more hope for YIMBY-like interventions, because helping somewhat then causes the kinds of cascading changes you want. Matt is still right here. If we make it clear kids are unwelcome, as they have in so many places in South Korea, that is going to make it very difficult for families considering having kids. It will also make people feel they don’t know how to exist around kids. I know a lot of people who are scared to interact with children let alone consider having one. That is hard to come back from.

Artificial Wombs

Human trials of artificial wombs could begin soon. There has been success with prematurely born lambs, and they hope to extend that to humans born prior to 28 weeks, then to high-risk pregnancies. Why go straight to lambs? Pigs are difficult to work with, and this:

Non-human primates are a gold-standard animal model to precede clinical trials because of their physiological similarities to humans, but their fetuses are even smaller than those of humans, and the ethics of conducting such experiments are complex.

…

“You only have one chance to do it right, and the learning curve should not be on actual human beings,” obstetrician Guid Oei says.

I mean, no, such experiments are not morally complicated, however much we as a society proclaim that they are. We are otherwise going to let babies die, or run the same experiments on humans instead. The good news is we seem to be able to move past this.

There’s always the ‘we should not let you do or invest in this thing when I wish we were instead doing or investing in some other thing.’

Some researchers also worry that artificial wombs would represent an expensive technological solution to a deeper problem. Michael Harrison, a fetal surgeon at the University of California, San Francisco, sometimes called the ‘father of fetal surgery’, says the data he has seen so far have been promising. But he questions whether it’s worth “throwing all that money and tech” on babies that have a poor likelihood of survival instead of finding ways to improve pregnancy support or standard techniques for preterm critical care, which could reduce the need for artificial-womb technology in the long run.

What about the other problem? You know, that the wombs might work?

The US Food and Drug Administration (FDA) will convene a meeting of independent advisers on 19–20 September to discuss regulatory and ethical considerations and what human trials for the technology might look like. The committee’s discussion will be scrutinized by the handful of other groups around the world that are developing similar devices, and by bioethicists exploring the implications for health equity, reproductive rights and more.

…

Safety questions won’t be the only ethical concerns. The development of artificial wombs represents a “big transformational leap” that “solves lots of issues”, says David. But, she adds, “it also opens up a whole new slew of issues”. After the 2017 study¹ generated extensive media coverage, fears spread that artificial wombs could one day replace pregnancy.

…

Those developing artificial wombs in the United States will also have to contend with a politically charged environment for reproductive rights. Flake and Mychaliska have been careful not to give any indication that an artificial womb could change the definition of fetal viability.

So we have three concerns here.

One concern is that we might be able to replace pregnancy.

Another – I’m trying to use neutral language here – is that we might be able to make possible earlier survival outside of the womb earlier, which might endanger reproductive rights? So we should instead consider not doing that?

And of course we have equity, the worry that if we make some people better off then other people might not also benefit the same amount, we did not bring enough cupcakes for the entire class.

I can’t even, sometimes.

They say that full artificial pregnancies remain quite a long ways off. That is presumably true unless AI advances all tech development, but also once the technology reaches practical usefulness and gets a foot in the door I expect things to escalate quickly, with orders of magnitude more attention and funding, fueled by worries about declining birth rates and the I’ll-pay-anything market of women who want children but are not medically able (or willing) to handle a pregnancy, or for whom it would otherwise be highly risky.

That also points the way towards heavy subsidies. If such devices do become viable, paying for them under at least some circumstances, in whole or in part, via insurance or otherwise, would be one very clear way to boost fertility in an efficient, highly targeted manner.

Hell, merely removing artificial cost and logistical barriers would help a lot. Small upfront expenses and stressors loom large.

What might the future look like, if technology advances far enough?

Mason: If/when gestation-as-a-service reaches a price point around $2k, our entire framework for reproductive rights will be turned on its head — especially if we’re also able to print gametes on demand. Rudimentary foreshadowing w/ the growth of the surrogacy industry — it’s gonna get weird.

There is essentially zero chance that low-cost artificial wombs won’t be accompanied by parenting licenses or gestation permits of some kind. There is no way people will be let loose to order babies for the price of a MacBook.

Eliminating all the costs of getting a newborn to exist – say the government paid for all of it via IVF and surrogacy, so we don’t have to imagine new tech – would lead to a lot more kids, but it would not make raising kids cheap.

I do think we are the kind of society that will tell people they cannot build housing or take life-saving medicine, and oscillate wildly on reproductive assistance between ‘this process requires these additional things that cost $200,000 out of pocket’ and ‘this is a human right that must be covered by insurance with no questions asked’ to ‘this is not ethical in some situations so we are banning it in all of them’ on a whim. All things are possible.

What would be the right policy response? If the up-front price got down to $2k, we might have to find a way to restrict access, so people did not create children they were not prepared to raise and support – or at least, they did not do this beyond the number others want to raise to support, but presumably the adoption market falls through the floor because the reproductive tech is available to everyone.

This would be a happy problem. It would mean that our fertility issues are now going the other way, and are fully under our control to steer further.