April 17, 2009

Becker warns of demographic shifts due to falling fertility rates

[img id="77601" align="alignleft"] Chicago Booth professor Gary Becker discussed current worldwide demographic shifts Wednesday as part of the Becker Brown Bag Series at the Booth School of Business

Calling the trends a “modern demographic revolution,” Becker stressed the possible economic ramifications of the observed decline in fertility rates across all global regions. Among other things, pay-as-you-go social programs, such as social security and Medicare, and research and development efforts stand to suffer, Becker said

Many countries may even see their population sizes fall. Without influxes of immigration, the low fertility rates seen in the majority of European countries as well as China and Japan, among other countries, will cause decreases in their populations

Becker pointed to an “unprecedented expansion in benefits to higher education” as playing a crucial role in the decrease in average family size, claiming that higher education and fertility are inversely related. The rise in women’s educational attainment, in particular, has upped the value of a women’s time outside of the household thereby decreasing fertility rates.

Becker also drew on his own groundbreaking quantity-quality theory of children to argue that parents are increasingly opting to improve their children’s quality by assisting them in their pursuit of higher-level degrees; as a result, parents can afford to have fewer children, and the quantity of children per household has dropped. These educational trends are “not unique to the U.S.” and, in fact, Becker stressed that the U.S. is “no longer a worldwide leader in higher education.

Instead of attempting to provide an exhaustive discussion of current population research and politics, Becker stated, “I hope that this will stimulate some research on the topic.” He also left open to debate the question of whether economic forces can prove successful in returning fertility rates to their former higher levels.