The $36,000 baby rebate
Robert Samuelson has written a birth dearth article for the Washington Post, as has Daniel Gross for Slate. Birth dearth articles appear on a fairly regular basis and are almost indistinguishable from one another. Typically they are initiated when some industrialized nation with low fertility rates announces a game plan to goad its women into having more babies, or when another book on the subject hits the market. In this case it is Vladimir Putin who has proposed that Russia pay women a lump sum bribe of $36,000 to have a child.
Samuelson takes several quotes from the book Fewer, by Ben Wattenberg (senior fellow of a conservative think tank called the American Enterprise Institute). It was published a few years back. Go here to see a review of it by Newt Gingrich.
Population issues are much more complex than people realize. Malthus had no idea. For example, two trends mentioned in Samuelson’s article that economists have linked with decreased fertility rates — increased life expectancies and low childhood mortality rates — are directly contradicted by Russia’s falling life expectancy (now in the fifties), along with the highest childhood mortality rate in the industrialized world.
The same article also tells us that fertility rates drop with increasing income, while the article in Slate gives us a rather glaring example of the exact opposite:
The U.S. baby boom, which reversed long-standing declines in fertility rates, took place against the backdrop of a broadly expanding economy. In the 1950s, people raised in the Depression were highly confident that they could give their children a better life, and so they had more children.
Economists have an annoying tendency to brush these numerous inconsistencies under the rug. It seems to me that (along with other assorted mysteries) we really don’t understand the mechanisms controlling fertility rates very well at all.
The Slate article mentioned that it costs “anywhere from $139,110 to $279,450 to raise a child to age 17.” The source for their data shows that the more money you make the more it costs to raise a child, which is another way of saying that the less you make, the less it will cost. But to put it more accurately: the more you make, the more you can afford to spend on your child, and vice versa. The reason it costs more of course is because we can’t help but compete with each other (even through our children) on a primal level. We are quite simply trying to impart every advantage that we can to our children.
The bottom line is this: Where would China’s economic miracle be today if the government had insisted that every woman have five kids instead of promoting family planning? The way out of the fertility problem is economic growth through well-implemented immigration programs, which is also a very effective way to share wealth and reduce poverty. Vladimir, listen to me, you can’t reproduce your way out of this mess. You are going to have to be a little more creative than this.