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04/04/2010

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Evam Harper

"There are several reasons to be concerned about the below population replacement fertility levels in all of Europe and about half the world’s population [...] Low birth rates in richer countries also induce increased migration of young workers from poorer countries with large families to provide the unskilled and other young workers that every society needs."

Isn't increased labour mobility a GOOD thing? Y'know, free markets and all that?

Peter Davis

The issue of declining birth rates in "rich" countries raises a more basic question: why is this happening?

Towards the end of the 19th century, a well paid laborer in a Philadelphia steel mill owned his house, had 4 or 5 kids and his wife stayed home. Compared to many 3rd world countries, we are still incredibly rich, but middle income Americans are poorer in many ways today than their counterparts were 150 years ago. The wealth that technology has generated has been totally usurped by the expansion of successive governments.

In 1860, all levels of government combined took less than 10% of the GNP. With both parents working and trying to pay hefty mortgages without the help of an extended family, it is not surprising that the birth rate is down. There are certainly other reasons for this phenomenon; however, economics is a huge factor.

Stephen Ambrose

Really enjoyed the article.

Like most major changes for the worst, people need to understand that it took time for us to have these changes in marriage and fatherless families - it will take time to fix it. How? Well, let's go to the 'perfect world' scenario.

First, a 12 month pre-marital course, complete with discussion, retreats, consults, etc. Non-religious and perhaps some type of tax incentive for taking and completing the course. The understanding is that many people who are not ready will simply fall off the marriage vine, when discussing sex, money, future, kids, education, spousal roles, etc. Basically, from the time the marriage is agreed to, there is at least 12 months prior to the wedding. Time and education can hardly be a bad thing here.

Second, make adultery a crime. Not sure of the penalties, but perhaps a divorce and losing half your savings may not be a big deterrent - especially for those with little to no money anyway.

Finally, a generation to let these changes and others come into play. It took time to get this way, it will take time to change.

Joma Aquino

While it may be advantageous for poorer countries because they can land on jobs that are not provided in their countries, the aging population of rich countries should cause alarm because they will be losing their people soon.

Jim Vernon

Thank you for the respectful tone in which you addressed single motherhood. As the husband of a former single mother, I can attest to the detrimental effects of the vitriol employed by so-called cultural conservatives. They did not make my job as a father easier in any way. My wife and I agree with your point about the obvious challenges of single motherhood, by the way, but that's not what motivated my comment. Furthermore, I always leave room for respectful disagreement.

Best regards,
Jim

Morgan Plainspeak

@ Stephen Ambrose:

Whose perfect world? Why can't children be raised succesfully in a group setting, like a kibbutz or commune? Why must it be humanity's destiny to burden the planet with our outsized material wants and needs and substantial waste -- why can't we both control our population and be a successful species? Is monogamy the only course for all adults? Back to the future? I think not.

Robert

Divorce is not an easy process and you really need to be 100% ready when you decide to finalize it. I mean, you have to consider your kids' feelings as well because they will be the most affected members in the relationship. In some cases, using a co-parenting planner (http://4help.to/kids) is effective and will help the parents and the kids cope up with the situation. :)

tamara

about that year marriage course stephen ambrose is refering to, I believe, is a good idea but it needs some work. I always thought that the state should allow you to get married without living together for at least a year before marriage. Living with someone is the best way to know the real character of a person.
our generation wants everything right now!! technology is making it happen. We have lost our patience...marriage and children need a whole lot of patience.

Soren

@Morgan Plainspeak
Please point us to the enduring success of all of those 1960s communes. I see two overwhelming reasons that group parenting is infeasible: (1) the adults and (2) the children. RE ADULTS: Seems to me participants in such experimental groups naturally pair off, but the blurry lines of relationships cause strife. Marriage offers more than enough emotional and communication challenges for anyone; adding partners would add complexity with no apparent reward. RE CHILDREN: Do you really think that a child in his or her formative months and years has the capacity to bond meaningfully with a group of adults rather than a pair? When I was away much with work during months three through five of one my daughter's early life, I remember getting a look from her that seemed to say, "There's that guy again, the one the my mother seems to know." Even in early adolescent years two adult relationships is enough for many children to focus on. In adult years, I expect that a child raised by a group would associate with his or her parent in the distant way that one might associate with a home town or with aunts and uncles. I see no reason to expect better child rearing from a commune. I invite your response, Morgan.

Pericles Ferguson

Marriage did not emerge as a better way to raise children. Marriage was the way men could hope to be raising their own offspring and control the inheritance of their property. Many societies today still function with tightly controlled wives who have little or no property rights.

Jack

It's appropriate to consider marriage on an econ site as it's still the economic building block, not only for caring for the next generation, but for each other.

Still a whopping 75% of marriages begun in the 20's end in divorce; many with children. For many this may be temporary with remarriage after a few years. So it strikes me that just short of "communes" that single parents could benefit by sharing housing and with the burden of job plus child care benefit by combining forces with other single parents.

For the most part we've not had housing that lends itself to a small urban "commune" but perhaps unsold McMansions offered at steep discounts and built in suburbs with good schools etc. would be a better choice for some than trying to make it alone in a low cost apartment building on the "wrong" side of town.

Our proffs covered most of the reasons for lower marriage rates well, including the delayed marriages of college educated folk, but sort of "forgot" the miserable, home-wrecking, economic outlook for those of median or lower incomes.

As raising the next generation becomes much more economic burden than benefit to couples than the days of needing farmhands or someone to care for grandparents in old age, it does seem we should consider more subsidies, and in the case of single parents, more mentors at school or other community areas.

Also, with all the "talk" of the new economy requiring a better educated work force, it's well past the time for making sure there are no poor schools "down there" and making an additional two years of tech, or community college available at very low costs. How to pay for it? Ask Germany and others.

Rick

Women's financial independence has its consequences, and the declining birth rate and marriage incidence are two of them. If the State wants to encourage more people to marry and stay married, it has a number of options:
- a 'golden hello' for newlyweds (may increase uptake of marriage but, arguably not persistence)
- ongoing tax breaks for married couples (should childless couples receive this? gay parents of adopted children? isn't this a slap in the face for a mother abandoned by the father of her children? do we want to incentivise women to stay in abusive relationships?)
- increased public expenditure targeted at married couples (again, what support / services to couples need that aren't justified by the presence of children? what possible rationale can exist for targeting State resources at relatively privileged children with married pArents rather than relative under-privileged children who've only a single parent?)
- penalties to discourage divorce (again, tacit State support for abusive relationships), penalties to single parenthood (sure, kick people when they're down) or penalties to absent parenthood (high cost of enforcement)
I can't see how State support for marriage has any justification which doesn't involve supporting positive environments for child-rearing. The question is: do most single parents hold that status by choice? I'm not convinced they do. Escaping an abusive relationship shouldn't be turned into a financial consideration by the State. Responsible mothers should not be penalised for the irresponsibility of fathers.
The logical response must therefore surely involve holding absent parents financially responsible for their offspring in a just and efficient manner. And given that women now participate so heavily in the modern workplace, we need to recognise that unless we want future generations raised by childminders rather than their parents, employers must be more accomodating of the needs of both male and female parents.

Morgan Plainspeak

@ Soren:

You are, of course, correct. My point was, poorly presented, that there are alternatives to the "fairy tale" two-parent household. Divorce presents hardships to children, but so does living in a home filled with acrimony. A stable marriage is a fine ideal, but no amount of vetting and premarital training will mitigate the fact that people who may think they are well-paired, are not, or at least not for all the children-rearing years. Given the historical incidence of adultery, and current reports of sex outside the marriage (who knows what the real percenatge is), it seems that extramarital sex is simply part of the human condition for many.

Stephen Ambrose's suggestion that we make adultery a crime and penalize the adulterers half their assets seems a step away from painting them with a scarlet A and stigmatizing the innocent children.

Your criticism of communes is valid: do you feel such criticisms apply equally to kibbutzes? Still, it seems to me many children are raised in the modern-day equivalent of a commune/kibbutz when their two-income parents leave their children with nannies, child-care personnel, coaches and teachers for most of their formative years.

Jack

Rick: My thoughts on marriage "subsidies" run heavily toward investing in the children who'll be our future; here's a few:

Access to health care beginning with pre-natal support.

Seeing to it that no child is sitting in a school room hungry.

Equitable and adequate funding of the schools for ALL of our kids. (Here funding OFTEN varies by 100% from one part of a city to another)

Affordable access to post-secondary education be it college, tech or vocational.

As you point out some families are destroyed by past history, addictions, and the "war" on drugs which is largely responsible for our imprisoning folks at TEN times the rate of other civilized nations. The only nation coming close (but falling short) is Russia.

There seems little reason to "visit the sins of the (parents) on the sons and daughters"

Rick

Hi Jack,

I think we're on a similar page. From my perspective the State is a service provider for all citizens, therefore it has little business in social engineering. If the political objective is to direct resources at children, particularly disadvantaged children, then supporting marriage is clearly an ineffective intermediary step that can be bypassed in public policy terms. Supporting marriage through additional State resource effectively diverts more finite resource toward childless couples and more privileged children.

Of course, the case for bringing up children within marriage is strong from a child-outcomes perspective. But is the answer to the decline in marriage for the State to favour some taxpayers over others?

If Western nations want to show their citizens they value marriage and direct parenting, they need to look at school hours, the availability of good education and trustworthy childcare, and a more progressive social norms in employment. We send a bizarre message to young women today: get an expensive education, get a high-powered job, climb the career ladder, have children, forget about promotion, try not to be miserable juggling work and parenting, leave all your intellectual prowess behind and try to enjoy endless Disney.

If we want women to work, we need men to parent. Parents (men and women) need sabbaticals from their careers, flexible hours and access to rewarding career opportunities. Employers need to move away from business models which depend on young single people working long hours and toward value adding. Do we really want a society where the only people who get ahead in the world of work are the young, the childless and those able to afford stay-at-home wives or nannies?

Imagine the warped values of the generation we'll create if we continue as we have.

Jeff

Interestingly, in the new tax bill making it's way through Congress-if each person in a marriage makes 150K per year, they save significantly on taxes if they divorce, rather than stay married.

New tax policy incents divorce. Kind of dumb when you look at stats on outcomes.

Jack

Rick: Agreed, and your comments go to the larger issue of harnessing the power of capitalism for the benefit of the citizenry as compared to being enslaved by a "market" that has run amok in recent decades. The Chicago school finally being hauled on the carpet?

When we studied the advantages of trade and relative advantage, I don't recall slave wages being mentioned, nor a few powerful "banks" carving trillions off the top. Goldman had over a trillion in assets under control (or ha! not under control!) before the meltdown -- ten percent of GDP in one outfit trading for its own account at reckless levels of leverage?

Or..... in 1980 CEO's were paid, an already high by international stds, 50 time working folk's pay, today that number is 500 times. Are working folk or the community benefiting from such a change?

mike

"Interestingly, in the new tax bill making it's way through Congress-if each person in a marriage makes 150K per year, they save significantly on taxes if they divorce, rather than stay married.

New tax policy incents divorce. Kind of dumb when you look at stats on outcomes."

Which party do unmarried people tend to vote for again? Not so dumb when you think about it.

Rick

Jeff: I'm not sure we should be getting too worked-up over the fiscal incentives for divorce when they only kick-in at a family income of $300K+. It's not the children of high-earning divorcees society needs to worry about!

Jack: I wouldn't put the point quite as strongly as you do. The Chicago School made a very important contribution to supply-side thinking. In effect, it asked the questions which should help keep Keynesians honest. Obviously you should borrow in a downturn; the real problem is when you don't save during growth.

I think it's a distraction to look at marriage and child-rearing in purely economic terms when much of the failure has been political. Fiscal policy is not always an effective instrument of social policy. And in this case, what exactly is the aim of social policy on marriage and child-rearing? Are we really pining for the days of 'little women' at home? Or do we need a wider conversation about how parenting might be bettered in societies when women are well-educated and have careers?

Jack

Rick: And yes, Keynes' counter-cyclical implies having a power stroke and intake stroke, trouble is, it's all too tempting to keep spending. I'd agree that Milton brought something to the table in his do nothing but get the money supply right, though, politically it led to Reagan's "government is the enemy" politic and after being elected on a "starve the beast" platform (that I thought not a bad idea at the time) was rolled by the Pentagon and went on spending.

What I see sold as "supply-side" seems a farce to me, ie if only we give the wealthy and corps enough tax breaks and more wealth yet, they'll be prompted to invest where there is no demand with the imagined benefits "trickling down" ........after they accrue to the investors. Nah........ it's consumer demand that hauls the wagon. Be it a gold rush, housing boom or the internet/communication boom, where there's demand investment follows.

Housing, for example COULD return to building 2.5 million units a year in a heartbeat if there was demand for them. Without that demand there is next to nothing banks, WS, the Fed or anyone else can do to soak up the surplus which will gradually be absorbed by young household creation of 600,000 or so, IF they have a job and IF that job pays enough to justify a properly underwritten mortgage.

What's puzzling looking back, is that Gspn who seemingly could spot a nearly invisible wavelet in the bond market, and others, not seeing or responding to a house price graph that looks like a ski-jump.

http://mysite.verizon.net/vzeqrguz/housingbubble/

I could see him dismissing the slope itself as "irrational exuberance" that the market would self-correct. Since prices were 40% or more above historical ratios to income, they surely would correct! But then KNOWING those millions of homes were purchased on very small downs toward loans made by banks, as he MIGHT have cryptically mumbled "at considerable leverage".

Today, the only way to get this moving again, for the US and the world that so depends on our strong consumer market is to get a buck in the hands of consumers by whatever means possible. Later, we'll grumble about paying for the rescue in taxes, but taxes are paid on profits and wages; it's a lot worse to not have the profits or wages.

Mike Hunter

"I am not claiming that children are worst off when their parents divorce if their parents were fighting a lot, or if they had abusive fathers."

Mothers are statistically more likely to abuse their children then fathers. Shame on you Mr. Becker for chivalrously singling out fathers as abusers, when mothers are usually the ones doing the abusing.

Rick

Hi Jack,

Supply-side economics needn't imply non-interventionism or that monetary policy should be the sole instrument. Investment in infrastructure, education, knowledge transfer and re-training give lie to such ideological hijacking. A key failure of Thatcherite economics in the UK has been the enduring poverty of towns in the North of England, where mining, steelworking and heavy manufacturing has declined but the workforce has not been re-skilled, new industries have not been attracted and basic infrastructure has withered. Through neglect, we have traded down from skilled, stable, well-paid heavy industry to unskilled, unstable, poorly-paid call centre jobs. If only there had been some supply-side thinking!

I'm not sure how things work in the US, but in the UK rocketing house prices did not prompt an increase in supply. People want to live in the already densely-populated South East (1 in 10 Brits lives in London - the city's population is higher than SCotland and Wales' combined), where planning regulations are strict (in order to maintain a 'Green Belt' around London and avert urban sprawl). So until other cities and regions become attractive places to live and work, excess demand and fixed supply in London will continue to distort the UK housing market. The relationship between land and property values is also different to other countries. In Germany, for instance, it often makes financial sense to buy land, demolish the existing building and build something new. In the UK, new building is not only tightly regulated, but highly expensive. Better to gut a Victorian house than tear it down.

So, yes, as per your argument there is huge pent-up demand for housing in the UK, but structural factors mean that (a) the market won't supply it and (b) the government cannot simply intervene and allow 100,000 new homes to be built in the Yorkshire moors (no jobs, no transport), near Liverpool (a hellhole of deprivation) or in London (no room).

I agree with you in the broad: no recession in history has ever been escaped successfully through the persuit of tight money. Inflation is the way! The macro concern is the ongoing 'generational negotiation': boomers are living longer than their predecessors and need healthcare, social care and pension income. This has driven the persuit of short term value creation for pension funds, which must deliver on the foolish promises they made many years ago. Simultaneously, boomers have valued a low inflation environment which protects the value of their capital but has locked younger generations out of home ownership, single breadwinner family lifestyles, low taxes and quality public services.

Here's the writring on the wall: inflation will return. It must, in order to incentive young people in the West to stay here and aspire. Boomers wanted easy divorce, women in the workplace, free healthcare and higher education (in the UK), gas-guzzling cars, final salary pensions, jobs for life, early retirement and a high ration of private home ownership. They ran the governments, institutions and companies which created the Great Recession - and they cannot avoid their share of the pain they created. Inflation is how the West will erode the value of its massive debts, and inflation is how the boomers will pay.

Jack

Rick: What an interesting summation! We could not sum up the US trends/problems in a similar manner as it varies from region to region, but yes, as most know, in general the center of the nation and rust belt has been depopulating for decades. But there's the huge exception of low cost, low tax, typically low service "sun belt" states growing with jobs from the call centers, light mfg to high tech, medical and those retiring from other areas. And, Ha! in terms of energy consumption much of it is land many of us would consider uninhabitable until central air conditioning came along.

It's interesting to consider how cities grow and the effect of anti-sprawl efforts. In the LA of the fifties during a time of super-growth there was little planning, though perhaps "government" led the way with building freeways to the cheap and abundant land to the south and north. At first they were clearly bedroom communities bordering orange groves. Disneyland was built on a two lane back road. Clean aviation and high tech businesses appeared and today the Orange County area is a megalopolis eclipsing LA.

But all is not well! In theory one could live entirely in any one of the towns that make up So Cal but in practice things seem work out such that driving 2000 miles a month is common and zipping has turned to slogging through traffic.

From your description the UK seems ripe for a planned leapfrogging from London. Today when I see the costs and hassles of living in say, NY, it seems the only reason to be there is if one's job is in the top 1% percent of earners. At some point doesn't it seem the costs and impossibility of solving urban problems, combined with the information age would lead to decentralization? For example "Silicon Valley" is not in LA but emerged from farmland, and more recently Microsoft, and many others are not in San Jose, but on a lake in once sleepy Seattle with the whole Northwest nearby. BTW my home is in Anchorage, Alaska.

Boomers and inflation! Ha! While visiting So Cal in an earlier R/E boom everyone was "creatively" financing homes and flipping them for another, perhaps buying an imported Mercedes with the "profits" gleaned from their neighbor. Some became wealthy but for most the result seems to be two earners going full tilt to pay for a half-million post-WWII bungalow that our parents bought new for $10,000 and made the mortgage on single income.

But more seriously, can we even create inflation? Too much money chasing too few goods in a world of nearly infinite labor supply and increasing productivity per capita? Or cost push from the soaring resource prices of a roaring economy? Or, high interest rates due to a shortage of capital for projects offering high returns? Or, even "governments spending too much" as budgets unavoidably tighten from falling revenues at town, state to national levels? I wonder.............

katmere

More so than "a father" there is some argument that financial and emotional stability, which is often created by a loving, two-parent home, are what have the greatest impact on children. If that can be created with or without a traditional nuclear family, the same benefits are likely to accrue regardless.

The larger the reliable social network a parent has, the better they can weather the storm of uncertainty that life imposes upon them. If that parent, or parent-figures, are able to manage their own lives, then they can expend time and energy on see to the care and greater education of their children.

It is perhaps trite, but there is a reason that "it takes a village" is a phrase that stuck.

It isn't wrong that intact families lead to these results. It is just that this view does not get to the heart of the matter and overlooks over avenues for achieving the same ends. If policymakers use these base assumptions, to the exclusion of others, for creating policy, they can create gaps in the social safety net, needlessly, by shoehorning causation into a tidy, traditional little box.

Dosbol

A very good blog! I'd tell about it to everyone I know well in my community.
As for the issue, it is a huge problem in my opinion. It is sad to see that although our well being is growing steadily, anyway the purpose we live for (family and children [IMHO]) is deteriorating. In general the trend in developed and semi-developed countries is that marriage as an effective institution of human social relationship is "rotting".
P.S. As for me... I plan to have a big happy family!
Best regards,
student D.

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