There is a certain kind of problem whose simple temporal horizon makes solutions difficult: the longer the time between today’s decisions and tomorrow’s disasters, the more difficult to require sacrifices now to ensure that these disasters never happen. Climate change is the obvious example.
But it is increasingly clear that there is another: the population decline. As the falling problem attracts more concern-and previous efforts to reverse it have been insufficient-a growing body of research indicates that a genuine solution will require a paradigm shift in understanding society about what is worth paying and who should pay for it.
For most of the world, fertility rates are falling. As economies develop, birth rates by 1,000 women of childbearing age tend to decrease – and when economies develop especially fast, these rates often plummet to particularly low levels. In many countries, they are already below 2.1 births per woman, the “level of replacement” needed to keep the stable populations from one generation to another.
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If current trends continue, up to 2050 more than three quarters of the countries will be below the level of replacement. Until 2100, populations in some of the main economies will fall from 20% to 50%. And since birth rates accumulate as debt, the more fertility rates fall into a generation, the more they would need to increase next to compensate for numbers.
If birth rates do not change, the end result would be human extinction. This is still very distant, but the population reduction will probably have serious consequences long before that. As the proportion of active age adults compared to children and dependent retirees decreases, there are fewer workers to support the social protection network.
The result is that taxes increase, the quality of public services deteriorates and the economy may shrink.
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Politicians, policy formulators, and the public increasingly realize that this is a serious problem. And yet, despite a variety of financial incentives, advertising campaigns and other policies, birth rates continue to fall.
“Rinks” favor each other
The work of Nancy Folre, feminist economist at the University of Massachusetts, Amherst, suggests that the problem may be that existing programs are simply too small to make a difference in the real problem: as countries get richer, it becomes much more expensive to be a father or mother.
This is not just because direct costs increase, although this happens. In fact, the greater question is the cost of time required by parenting, which, although unpaid, is not free and, in fact, becomes much more expensive as economies develop.
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In 1994, Folbre published an article with a provocative statement. “Individuals who dedicate relatively short time or energy to child raising,” she wrote, “they are benefiting from parental work without contributing.”
“Free Riders” (rides), in the economy, are people who benefit from goods or services without paying for them. As all US citizens are entitled to children’s future gains through the money they will pay to support Social Security, public debt payments and other programs, she argued that people who enjoy these benefits without doing the job of having and raising children are benefiting without contributing.
In fact, she pointed out that parents suffer a double damage because unpaid work to take care of their children, which represents a large part of the cost of parenting, is also left out of government benefits calculations such as Social Security.
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Thus, parents who give up part or all their paid work to take care of their children not only lose income in the short term; They also receive a comparatively lower portion of public benefits in the future. Unpaid work cannot be spared in an account with tax advantages, such as a 401 (K), placing parents even more back in the accumulation of private savings for retirement.
The argument of folly is not only that the current system is unfair, but also that it makes little economic sense. Failure to compensate for people for unpaid work of raising children creates a disincentive to have children and therefore leads to falling birth rates that harm society as a long term.
Government programs such as Social Security, according to this argument, took many of the children’s financial benefits and shared them with the general public. At the same time, private costs of having children have fired, because increasing salaries available to parents at paid work also increase the opportunity cost of unpaid labor.
When parents reduce their work hours to take care of their children, for example, they lose income. And even if they work full time and pay for day care, the care of children and the housework they do before and after paid work still have opportunity costs: overtime not done, leisure, sleep and investment in other relationships.
Subsidies and benefits
A standard prescription for the problems of the “carin” is government intervention, either to transfer more from production costs to society or to privatize more gains. For parents, this may mean increasing social security payments for each child who have or grant tax credits or direct subsidies.
Many governments already offer at least some subsidies to parents to compensate for the costs of raising children. The United States, for example, give most parents a tax credit of up to $ 2,000 per child per year.
Some countries, such as the Nordic nations, offer state -subsidized parental license policies and state -subsidized day care that reduces direct costs to levels with which most American parents can only dream. Still, these cheap, socialized health and affordable universities are in the same boat of population decline as the rest of the world.
Although the benefits are generous, food, housing, and day care prices are so high in these countries that parents are still at higher costs higher than elsewhere, according to a 2023 study. State subsidies compensate only a fraction of the high costs of things such as food, housing, and paid day care. And high salaries increase the amount of unpaid time of parents.
Based only on direct costs, if the average father or mother in Sweden suddenly became non-pai/mother, he could consume 55% more in lifelong goods and services. In Finland, it could consume 50% more. The average European father/mother in the researchers sample, on the other hand, could consume only 31% more.
When the parents’ time value is added, the numbers get even more extreme. The non-Pai/hypothetical mother in Sweden could consume 164% more throughout life, and the Finn, 146% more. The average European, on the other hand, would consume only 108% more.
There is some evidence that money transfers to parents really make a difference in fertility rates. Lyman Stone’s research, senior researcher at the Institute for Family Studies, a conservative pro-Natality conservative tank, suggests that fertility rates increase about a quarter of percentage point for each percentage point of GDP that governments spend on money transfers to their parents.
“For the US to buy their replacement fee – that is, from the current 1.6 to 2.1 – in the long run it would probably cost from $ 700 billion to $ 1 trillion a year,” said Stone.
This is an impressive value, even if the goal were to stabilize populations over time rather than immediately reaching replacement rates. But if children are social goods, then, in financial terms, it would be an investment.
“It is inevitably a matter of public values and commitments. You need to decide on what you care about and what you are willing to pay for it,” said Folre. “We need to find out what our priorities are and what we think is the value of a human life.”
This article was originally published in The New York Times.
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