The US needs more babies, more immigrants, and more integration

Lots of babies
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What happens — politically, economically — when people have fewer babies? Pundits from across the political spectrum are suddenly wrestling with the question.

Derek Thompson at the Atlantic started things off by suggesting there was a "doom loop” of liberalism — a widespread trend in Western nations that should cause significant concern: Education and feminism lower fertility, and so countries turn to immigration to make up the difference in the labor force. As the number of immigrants increases, it becomes harder to integrate them, which gives rise to blowback populism.

Ross Douthat of the New York Times fired back, respectfully suggesting that secular liberal societies could incentivize fertility of native citizens by deploying some fairly minor policy tweaks, including bigger financial incentives for childbearing — and by promoting different family norms, like increased involvement in religious communities.

And now Bryce Covert, writing from a feminist perspective, has written an op-ed for the Times that tackles the issue from a slightly different angle, arguing that the Trump administration’s curtailment of access to free contraception could have serious, negative economic consequences as women shift from jobs to child-rearing.

The reality of declining fertility turns out to be quite complex. To begin with, it should be noted that while fertility declines in the 20th century were driven by a mix of improved contraception and declining desired fertility, 21st-century declines have occurred with virtually no correspondent decline in women's’ desired number of children: Women in America continue to report wanting to have more children than they in fact have, and the number has not declined very much in this century; indeed, they desire well above replacement-level amounts of children.

But we don’t make it easy for them to act on that desire. Far from a simple story of secular societies liberating women from the onerousness of child-bearing, declining fertility in post-industrial societies is also a story of disappointed hopes. (The story in developing countries is quite different.) The shortfall in fertility is growing. Now these “missing kids” are becoming nearly as numerous as unintended births.

Higher fertility would be good, but it’s hard to achieve

If we take the expressed desires of American families seriously, and especially the desires of American women, then we need to find a way to help them achieve their goals. Financial incentives, it turns out, are not highly effective. Studies find that policies that encourage parental leave or offer financial subsidies to parents require lots of money for small fertility gains. Likewise, many conservatives wrongly believe that banning abortion or restricting contraceptives might boost fertility, but the best evidence suggests such restrictions have at best weak impacts, at least in developed countries.

Cultural forces, meanwhile, can be extremely powerful but are difficult to engineer, especially in big, culturally pluralistic societies like the United States. Douthat’s preferred prescription (and my own), that people should be more religious, may have a very limited impact. Even societies with high religiosity, such as in Africa or much of Eastern Europe, have seen falling birth rates. This decline in religious countries (including where religiosity is stable or rising!) is surprising, because religious groups tend to place a high priority on family, children, and multi-generational living. But the fertility-suppressing forces of modern economies appear to be even more influential.

In a low population growth society, inequality is more easily entrenched, parental wealth more easily passed on to heirs, new startups are less able to expand rapidly, and declining generational cohort sizes reduce the need for certain classes of labor (child care and education most notably). The logic is not entirely intuitive, but a declining population means the employed share of the population must rise to maintain existing economic functions, and productivity per worker must rise to maintain output. Yet for more than a decade productivity growth in the developed world has been low and the employed population share has been stagnant or falling.

A low population growth environment means the economic pie grows slower too — which means, in the long run, that wealth consolidates. And in the very long run, we miss out on potential Mozarts, Washingtons, and Edisons.

It shouldn’t be immigration versus fertility. Let’s increase both.

Both Thompson and Douthat rightly see a threat in low population growth, but each focuses on just one side of the problem. Douthat, for example, would have us all have more babies to avoid the need for immigrants.

But so long as American values of pluralism, integration, and personal liberty persist, we will need immigrants to fill a vital role in our cultural milieu. Plus, boosting fertility is going to have to be a long-run play: In the short run, US population growth persistently undershoots forecasts. Even if you’d prefer Douthat’s approach, in the abstract, we need immigration to rise from its presently quite low levels to stave off short-run population strains.

No serious population growth agenda for America can lean on just fertility to accomplish its goals, at least not if it wants to avoid serious short-run economic crises and preserve traditional American values, which are inseparable from openness to immigrants.

Thompson, meanwhile — while arguing that integration of immigrants gets harder as births make up a smaller and smaller share of population growth — skips over the sources of those low birth rates. He devotes no time to considering whether, perhaps, we might benefit from making some political, economic, and cultural adjustments to empower women and families to have the kids they want to have. Given how dire his forecast is, it is genuinely perplexing that he basically ignores pro-natal policies.

What we really need is a political movement in favor of population growth from all sources. We need policies that remove fiscal penalties for marriage and encourage marital stability, that recognize the service parents do for society, and that subsidize childbearing and child-rearing accordingly — even if, on their own, such policies won’t restore us to stable fertility levels. We need new cultural norms that make our society more family-friendly. And we need cultural leaders to set an example, have kids, and promote childbearing and parenting.

Proposals for a pro-population growth agenda

What kinds of policies might help? Replacing the estate tax with a per-heir “inheritance” tax would encourage wealthy people to have children and also to break up their estates, killing two birds with one stone. Expanding existing tax credits for children, and consolidating complex child tax provisions into one larger benefit, would help ease parents’ budgets — even more so if refundability were expanded (or if credits came by monthly check).

And we could get even more creative: Should rent control be adjusted for family size? Should bigger families get to cut in lines? Should minivans with car seats get special parking places akin to those for disabled people? Should families with at least four kids be given a public honor or award and a meeting with their senator or governor? Many countries have tried such social or cultural policies: Sometimes they have an effect, often they don’t, but as part of a wide basket of political and social changes, they may be useful.

Here’s an idea that’s even more out there. Since traditional agricultural societies enabled parents to “capture” the economic rents of childbearing because families shared income, the economic returns to childbearing were large. This remains true in developing countries where family networks share incomes, including through migrant remittances, but it’s not true in America. We can fix that. We could set a small payroll tax on each person, and allocate it to their parent (with exclusions for cases of abuse or neglect, of course). Such a “parental dividend” would alter the long-run financial calculation of parenting.

We might also consider higher Social Security payouts, in their retirement years, for people who had more children.

And let’s not forget “personal” policies. If getting ahead in your industry requires happy-hour drinks three nights a week, that’s unfriendly to families and may be preventing your female colleagues from having the family they want. Check your childlessness privilege. If you never volunteer to babysit your friends’ kids, but expect to benefit from their Social Security taxes, you’re a societal free-rider.

If your social activities require your friends to get babysitters because your house isn’t kid-friendly, then make your house kid-friendly. There’s no way to legislate such behavior; that would be totalitarian. But we can each voluntarily change our behavior.

Meanwhile, we need to continue our traditional American immigration policy, meaning an open hand to anyone who will work hard and integrate into American life. We should accept more immigrants, even as we stiffen requirements to learn English. We should accept more refugees, even as we prioritize pro-integration resettlement policies like requiring refugees to participate in native-majority, English-language-using social organizations.

Contra the Trump administration, we should expand the “diversity” visa category massively, seeking immigrants from unusual locations who, the research suggests, integrate faster: But we should screen them for personality characteristics that indicate personal flexibility and preference for diversity, which the research also suggests boosts integration.

More babies, more immigrants, more integration. This will yield an America that is larger, stronger, richer, more diverse, and more American than ever.

Lyman Stone, a Vox columnist, is a regional population economics researcher who blogs at In a State of Migration. He is also an agricultural economist at USDA. Find him on Twitter @lymanstoneky.

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