Why U.S. policies like baby bonds and child tax credits can't convince Americans to have kids
America's fertility rate is hovering around historic lows, with approximately 1.6 births per woman over her lifetime. This is below the level needed to sustain the population, which is 2.1 births per woman.
"Our population will, in the not too distant future, start to decline," said Melissa Kearney, a professor of economics at the University of Maryland. "That's why this is an issue for governments and for the economy, and politicians are starting to pay attention."
The economic implications of a shrinking population are broad. For example, fewer births mean fewer future workers to support programs like Social Security and Medicare, which rely on a healthy worker-to-retiree ratio.
"The concern here in the U.S. is that if we see kind of dramatic declines in fertility, we will eventually see also kind of a drag on our economy and our capacity to cover all sorts of government programs like Medicare and Social Security," said Brad Wilcox, a sociology professor at the University of Virginia and director of the Get Married Initiative at the Institute For Family Studies.
More from Personal Finance:House GOP bill calls for bigger 'pass-through' business tax breakTrump administration axes Biden-era barrier for crypto in 401(k) plansFewer international tourists may lead to 'staggering' economic losses
Lawmakers from both parties have proposed various financial incentives to address declining fertility.
The White House is considering lump-sum payments of $5,000 for each newborn, according to The New York Times. Last week, the House passed a massive tax and spending package that includes among other provisions, a bigger child tax credit and new "Trump Accounts" with $1,000 in seed money for newborns.
However, Kearney said such policy measures are unlikely to meaningfully affect long-term fertility trends.
"I think the kinds of financial incentives or benefits that we're providing just really aren't enough to really change the calculus of, a trade off of ... bringing a child into one's household or family," Kearney said. "That's an 18-year commitment. It's not just a one-year cost."
The issue may go beyond money. It's common for fertility to decline during economic uncertainty, but it usually rebounds once the shock ends, experts say. Surprisingly, birth rates did not recover after the Great Recession.
"That kind of caught a lot of demographers around the world flat-footed, because it also didn't happen in other countries," said Karen Guzzo, director of Carolina Population Center and a sociology professor at University of North Carolina at Chapel Hill. "So this goes against a lot of this demographic history that we have, which led people to start thinking, okay, what exactly might be happening?"
Even with stronger economic support, experts say America faces a deeper, more complex problem: a cultural shift in how people view parenthood itself.
"More and more young adults are kind of assuming that what matters for them is their education, their money, and especially their careers," Wilcox said.
Watch the video above to learn more about why government efforts to raise America's birthrate have struggled to address the deeper economic and cultural challenges.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
38 minutes ago
- The Hill
Ernst doubles down on Medicaid comment with sarcastic video ‘apology'
Sen. Joni Ernst (R-Iowa) doubled down on a recent quip about Medicaid in a Saturday post on her Instagram story. 'Hello, everyone. I would like to take this opportunity to sincerely apologize for a statement that I made yesterday at my town hall,' Ernst said in the clip, with a sarcastic tone. On Friday, the Iowa Republican was jeered after brushing aside life or death concerns about cuts to Medicaid, a public health insurance program for low income families and individuals with disabilities. 'See I was in the process of answering a question that had been asked by an audience member, when a woman who was extremely distraught, screamed out from the back corner of the auditorium, people are going to die,' Ernst said Saturday. 'And I made an incorrect assumption that everyone in the auditorium understood that, yes, we are all going to perish from this earth. So I apologize, and I'm really, really glad that I did not have to bring up the subject of the tooth fairy as well,' she continued. The Iowa lawmaker then encouraged viewers who want to see 'eternal and everlasting life' to 'embrace' Jesus Christ. During her Friday event in Butler, Iowa, Ernst promised that Republicans would 'protect' social services for the most vulnerable. She suggested that those who work and have opportunity for benefits elsewhere 'receive those benefits elsewhere' and leave taxpayer dollars for those eligible for Medicaid. Under the current GOP-House passed spending bill, millions would lose access to healthcare if passed by the Senate. 'Children will get hurt. Women will get hurt. Older Americans who rely on Medicaid for nursing home care and for home care will get hurt. People with disabilities who rely on Medicaid to survive will get hurt,' House Minority Leader Hakeem Jeffries said during the debate on the bill, according to Politico. 'Hospitals in your districts will close. Nursing homes will shut down. And people will die. That's not hype. That's not hyperbole. That's not a hypothetical,' he added. Every Democrat who voted in the House, voted against the bill. Some Senate Republicans have pledged to make some edits to the legislation, objecting to changes to Medicaid, the proposed phaseout of clean energy incentives and an increase in the federal debt.
New York Post
an hour ago
- New York Post
DOGE started the war on waste —now it's up to Congress to keep it going
As Elon Musk steps back from his role at the Department of Government Efficiency, making the savings his team found stick is now in Congress's hands. DOGE's crack team of mostly young techies shined a light on surreal instances of fraud and waste— from the literal mine where all federal government employee resignations are processed by hand to millions of dollars in fake unemployment claims filed with birth dates 15 years in the future. But for all of the fanfare, outrage, and outright hysteria over DOGE's supposedly drastic measures, the department's actual power was limited to mostly cancelling grants and contracts, which put a major cap on how much in savings could actually be realized. Much of the discretionary spending it lined up for the chopping block was approved by Congress, and Congress alone can decide its fate. Republicans make sure that DOGE's efforts aren't fruitless, and should, as quickly as possible. First, pass the $9.4 billion 'rescissions package' that the White House plans to deliver to the House on Tuesday, which will claw back $8.3 billion in foreign aid from the African Development Foundation and the US Agency for International Development. USAID, which Team Trump has near-totally dismantled, absolutely deserves such a slash: It bankrolled a mess of beyond-parody projects, like sending terrorist Anwar al-Awlaki to college and improving LGBT workplace inclusion in Serbia. The package will also yank $1.1 billion from the Corporation for Public Broadcasting, which oversees PBS and NPR. NPR and PBS long ago abandoned their role as nonpartisan public resources; both should have to rely on the non-government funding they insist dwarfs what the feds now provide. House Speaker Mike Johnson has promised to bring the package to the floor pronto and get it passed; the Senate should follow suit. But $9.4 billion is barely a drop in the bucket of the $1.9 trillion deficit, and far below the $175 billion in savings that DOGE touts on its website — a figure that represents more than $1,000 per US taxpayer if Congress can keep following up. That means the recessions package can only be the start: The next round of federal budgeting must aim to translate the majority of the DOGE savings into law, over the screams of special interests and other feeders at the federal trough, Democratic distortions amplified by the lefty media, and the fears of weaker-willed Republicans. Once agencies get used to their bloated budgets, wrenching money (no matter how ill-spent) back is an exercise in teeth-pulling; expect a lot of kicking and screaming. Though Musk won't be as hands-on at DOGE, the department's work isn't over; much of the team he hired will stick around, battling the fund-sucking bureaucracy. Some DOGE employees have been embedded into permanent roles at other agencies to keep on cutting waste, such as Jeremy Lewin at the State Department, and Stephanie Holmes and Tyler Hassen at the Interior. Musk didn't hit the (always unlikely) $2 trillion-in-savings goal he had on Day 1 of DOGE, but the effort drew crucial attention to Uncle Sam's incomparable talent for misspending taxpayer money. The cat is out of the bag; as voters long suspected, the feds are taking way more money than they need. DOGE started the war on waste; now it's up to Republicans in Congress to finish the job.
Yahoo
an hour ago
- Yahoo
Delaying Medicare enrollment. What to know
Dear Liz: When my husband was approaching 65, he was employed and covered by a high deductible healthcare plan (HDHP) with a health savings account by his employer. Neither his employer nor our local Social Security office had concrete advice on how to proceed about enrolling in Medicare, but after tremendous research, he eventually delayed enrollment. Now I am approaching 65. My husband is still working, and I am still covered by his health insurance, although both are in his name. Do I enroll in Medicare at the appropriate time or do I delay enrollment like he did? Answer: Delaying Medicare enrollment can result in penalties that can increase your premiums for life. If you or a spouse is still working for an employer with 20 or more employees, however, generally you can opt to keep the employer-provided health insurance and delay applying for Medicare without being penalized. If you lose the coverage or employment ends, you'll have eight months to sign up before being penalized. Delaying your Medicare enrollment also allows your husband to continue making contributions on your behalf to his health savings account. In 2025, the HSA contribution limit is $4,300 for self-only coverage and $8,550 for family coverage, plus a $1,000 catch-up contribution for account holders 55 and older. Once you enroll in Medicare, HSA contributions are no longer allowed. Medicare itself suggests reaching out to the employer's benefits department to confirm you are appropriately covered and can delay your application. Let's hope that by now your employer's human resources department has gotten up to speed on this important topic. Dear Liz: We read your recent column about capital gains and home sales. Our understanding is that if you sell and then buy a property of equal or greater value within the 180-day window, the basis for tax purposes is the purchase price, plus the $500,000 exemption, plus the improvements to the property, minus the depreciation, whatever that number comes to, and then the profit above that has to be reinvested or it is subject to capital gains. We talked to our CPA about this and he referred us to a site that specializes in 1031 exchanges. Answer: You've mashed together two different sets of tax laws. Only the sale of your primary residence will qualify for the home sale exemption, which for a married couple can exempt as much as $500,000 of home sale profits from taxation. You must have owned and lived in the home at least two of the previous five years. Meanwhile, 1031 exchanges allow you to defer capital gains on investment property, such as commercial or rental real estate, as long as you purchase a similar property within 180 days (and follow a bunch of other rules). The replacement property doesn't have to be more expensive, but if it's less expensive or has a smaller mortgage than the property you sell, you could owe capital gains taxes on the difference. It is possible to use both tax laws on the same property, but not simultaneously. In the past, you could do a 1031 exchange and then convert the rental property into a primary residence to claim the home sale exemption after two years. Current tax law requires waiting at least five years after a 1031 exchange before a home sale exemption can be taken. You can turn your primary residence into a rental and after two years do a 1031 exchange, but you would be deferring capital gains, while the home sale exemption allows you to avoid them on up to $500,000 of home sale profits. Liz Weston, Certified Financial Planner®, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the "Contact" form at Sign up for our Wide Shot newsletter to get the latest entertainment business news, analysis and insights. This story originally appeared in Los Angeles Times. Sign in to access your portfolio
