Economic Growth – Law Street

Falling Fertility: The Impact of Declining Birth Rates

Michael Sliwinski — Sun, 12 Jul 2015 14:20:10 +0000

Image courtesy of [Joshua Rappeneker via Flickr]

A report recently released by the National Center for Health Statistics revealed some good news for our nation’s population growth for the first time since the beginning of the Great Recession. According to the study, the number of babies being born and the fertility rate increased by one percent–the first birth rate increase since 2007.

Growing birth rates are very important for a nation for a number of reasons, and the recent surge in births also points to several positive indicators, such as greater financial security. Read on to learn about the fuss about the birth rate, what it means for America, and what we need to consider about population growth moving forward.

A History of Fertility

To start, it is important to understand the terminology associated with birth rates. This begins with Total Fertility Rates (TFRs). This measures the average number of children a woman will have over the course of her life. Another term to understand is replacement level. The replacement level is the TFR required to maintain zero population growth, basically the number of births needed to equally replace the adults who are having babies. The United States’ replacement level is roughly 2.1 births per women. It is higher than two because it factors in the unfortunate truth that some people will die before they reach adulthood and can reproduce.

Around the turn of 20th century, the fertility rate in the United States was over three. The rate then dropped precipitously following the Great Depression, but that trend somewhat reversed leading into World War II, and the TFR continued to stay above replacement levels until the 1970s. There was a slight drop in the rate in this era, during the oil crisis. However, when the economy began to rebound again, so did the nation’s TFR, which continued at or above replacement levels until the Great Recession. The video below shows the correlation between birth rates and the economy:

Based on this data, it seems obvious that the number of births in the U.S. is tied to the success of the economy. But a more nuanced explanation is also required. For example, even when birth rates cratered during the Great Depression, they still remained higher than the birth rates following the uptick of the 1980s and 1990s. Essentially, the economy plays an important role, but current culture does too.

Falling Birth Rates

The recent low birth rates in the U.S. are not unique. In fact low birth rates might be the clearest predictor of a country’s level of development. In several European countries and Japan, the birth rate is 1.5 or lower, meaning below replacement levels. So, why is this happening and what do these shrinking birth rates mean? First let’s analyze the “why.” One of the common threads between these countries, besides a higher standard of living, is the improved status of women.

More Access to Education

One of the major factors in dictating how many children a woman is likely to have is how educated that woman is. It has been repeatedly shown that women who are exposed earlier to education and continue with their studies have lower birth rates. Conversely, in other nations in which this is not true, such as Eritrea on the eastern horn of Africa, birth rates are much higher at 4.6. This stands in stark contrast to highly educated Japan’s birth rate of 1.4.

Having Children Later

While the recent data did indicate that American women had more children last year, it also revealed something else interesting. Most of the women having those children were older, in the age groups of 30-34, 35-39, and even 40-44. On the other hand, women in the age bracket spanning 20-24 saw their number of births continue to decline.

Although having children later is not the taboo it once was, having a baby after the age of 40 still carries with it an added weight of potential health risks. But thanks to the fact that older woman are often healthier, more prepared financially and mentally, and are generally better educated, many of these concerns can be off-set.

Immigration

Following the “why” is the “what”: what do shrinking birth rates mean? One of the most important is that low birth rates can have a dramatic impact on immigration. Namely, in countries with low birth rates like Japan or Germany, immigration is needed to simply maintain the current size of the population. Additionally, since many of these countries will start or have already started to have a disproportionately older population, immigration can provide a needed youth infusion.

Who is Going Pay for All This?

There is a lot riding on how these countries either maintain or increase their populations. Specifically, developed nations need people to pay for the wide-reaching entitlement programs enjoyed by older citizens as they retire, such as Social Security in the U.S. It becomes harder for the population to support these programs when the number of people paying into them shrinks. As populations grow older, the number of people depending on them will continue to increase. With this is mind, countries with low birth rates either need to accept immigrants or find new ways to boost their populations naturally.

The Future of Babies

How are countries trying to up their birth rates?

While these countries grapple with declining birth rates and the need for more immigration, to quote a poem by Dylan Thomas, they, “do not go gentle into that good night.” Indeed, many of these countries already have plans in place to reverse their falling birth rates.

In Japan nearly $30 million has been designated for encouraging young, single people to meet and eventually get married. In Russia, the government directly gives couples up to $12,500 for having a second child or adopting. Many European countries meanwhile, focus on benefits after the baby is born, providing lavish maternity leave or child care. The United Sates is actually an outlier on this front, as it does not offer guaranteed maternity leave and really only provides minor tax breaks to women having children. This may explain in part why older, more secure women are the ones increasingly having children in the US.

Assistance from Technology

Technology is also playing a greater role in the number of births each year. In the United States for example, approximately 2,000 more babies were born in 2013 than in 2012 through in vitro fertilization, when an egg is directly impregnated in a medical procedure. However, there are various kinds of fertility treatments–combined they accounted for 1.5 percent of all births in the U.S. in 2013.

Private companies are also stepping into the proverbial baby-making arena. Both Apple and Facebook are offering programs that will pay to have their female workers’ eggs frozen. The idea is that once these women are at a point in their career where family seems more accessible or appropriate they can then use their frozen fertilized eggs to have children.

This approach has received mixed reviews however. While some laud the efforts as providing an avenue through which women interested in pursuing a career and a family can still hope to travel, others see it differently. To the second group, this approach does nothing to address the reasons why women feel compelled to choose. Additionally the health risks associated with having children from frozen eggs versus unfrozen are no less diminished in older women.

Conclusion

Moderating population size is a tricky task. At times it has been predicted that the growing population is unsustainable and that we are headed for disaster. Conversely, people are currently concerned about not having enough children and the subsequent dangers that would present to society.

In the United States, the birth rate has been falling more or less steadily for the last one hundred years and now hovers right around replacement levels. While there seems to be optimism following last year’s uptick in births, it follows on the heels of several years of consecutive declines that put the U.S., like many of its developed contemporaries, below replacement levels. It is still unclear if the recent increase is sustainable.

Perhaps what the declining birth rates have revealed most clearly is the changing role of women and the continued changes necessary for women to have children and still be able to pursue a professional career. The importance of this issue can be showcased by both national and private efforts to address it. Still, as of right now, the issue remains unresolved and a remedy is unclear. Even with birth rates recently back on the rise, in the future the concerns may change from the number of mouths to feed to whether or not we even have enough people to help feed them.

Resources

Primary

United Nations: Total Fertility Rate

World Bank: Fertility Rate, Total (births per woman)

Additional

Time: Rising Birth Rates a Good Sign for the Economy

Deseret New National: Can Government Incentives Reverse Falling Birth Rates?

Population Reference Bureau: World Population Data Sheet 2012

Earth Policy Institute: Education Leads to Lower Fertility and Increased Prosperity

Time: Women Keep Having Kids Later and Later

Yale Global Online: The Choice: More Immigrants or Less Citizens?

Genius: Do Not Go Gentle Into That Good Night

Health Day: In Vitro births Continue to Rise in the U.S.

CNN: Egg-Freezing a Better Deal for Companies Than for Women

Michael Sliwinski

Michael Sliwinski (@MoneyMike4289) is a 2011 graduate of Ohio University in Athens with a Bachelor’s in History, as well as a 2014 graduate of the University of Georgia with a Master’s in International Policy. In his free time he enjoys writing, reading, and outdoor activites, particularly basketball. Contact Michael at staff@LawStreetMedia.com.

The post Falling Fertility: The Impact of Declining Birth Rates appeared first on Law Street.

China as a Military Threat: What Does It Mean for the U.S.?

Michael Sliwinski — Fri, 21 Nov 2014 12:30:28 +0000

Image courtesy of [Chuck Hagel via Flickr]

At the recent Zhuhai Air Show, China unveiled a new stealth fighter jet that one day has the potential to rival the United States’ own F-35. This came just days before President Obama was to travel to China to meet with its leaders as part of the larger APEC summit. While the significance of the timing of this display is debatable, it unquestionably shows China is determined to steadily improve and modernize its military arsenal. The question that remains is why? Is China’s path aimed at some future point at which it will surpass the United States as the world’s pre-eminent world power, both economically and militarily? If the answer to this question is yes–or even if it is no–does this then make China a military threat to the United States?

China and the U.S.: Positions in the Global Hierarchy

It’s the Economy

To begin to answer this question it is necessary to start by looking at these countries’ economies and in particular their economic growth. There are an infinite number of economic measures available to argue which economy in the world is the strongest; however, one of the most traditional and commonly accepted is Gross Domestic Product (GDP). In this regard, America has enjoyed dominance for decades going all the way back to the end of World War II. Today even in a supposedly more multipolar world, the GDP of the US economy, nearly $17 trillion in 2013, dwarfs that of any other nation and almost doubles the second place country, China.

Nonetheless, while the United States enjoys the largest GDP its rate of growth is much smaller than China’s. Since 1978, when it moved from a centrally planned to a market based economy, China’s yearly GDP growth has averaged nearly 10 percent. The United States during this time has experienced annual growth rates of 2 to 3 percent.

This figure excludes many factors, notably the fact that as a larger economy it is harder for the U.S. to grow at a rate equal to that of China. This issue has actually started to affect China as well as its recent growth has slipped to the 7 to 8 percent range as it seeks to curb several glaring social issues. Moreover, while China’s economy is growing faster and one day may pass the U.S. economy based strictly on total GDP, the average GDP per person is much lower in China than the United States. Regardless of the metrics though, why is economic might so important in determining whether China is a military threat to the United States?

China and U.S.: Military Spending

The United States Spends More (A Lot More)

A successful economy often goes hand in hand with a powerful military. Such is the case in the United States. As has been well documented, military spending by the United States far surpasses that of any other country. In fact, the edge in military spending by the United States far outstrips its edge economically by any measure. In 2013 for example, the United States spent an estimated $619 billion on military expenditures. This is more than three times what the second-place country spent in that same time period.

That second country on the list is–you guessed it–China again. In 2013 China spent $171.4 billion itself on military expenditures. While the United States again is overwhelmingly outspending China, it is critical to look at the growth rates, not just the overall total. As China’s economy continues to grow, so does its potential military capability.

China is Spending More Lately

In 2013, the U.S. actually saw a significant decline in military spending as a result of not only the ending of its wars in Iraq and Afghanistan, but also due to the sequester. In contrast, China actually increased its budget in the same year between 7.4 and 10.7 percent. In 2014, it is reported that China will increase its budget again by an additional 12.2 percent. While this still does not make China equal to the United States, it suggests a desire by China to project its power further beyond its borders. The video below provides a more in-depth explanation.

China and U.S.: Their Relationship

Long and Intricate

While China’s military capability is increasing this does not automatically make it a threat to the United States, instead it is also important to consider the relationship between the two nations. Historically this could be characterized best as complicated. The video below highlights the complex connection.

The United States has long had a relationship with China, almost from its inception. China was an important market following the Revolutionary War when it was shut out of many other places due to animosity emanating from England. American missionaries also flocked to China and Chinese immigrants came in waves to the United States and were instrumental in constructing the railway network, among other things. Things started going downhill, however, near the end of the nineteenth century during the rise of Imperialism worldwide. In 1882 the U.S. passed the Chinese Exclusion Act, which was aimed at curbing Chinese immigration.

Additionally, in 1899 the U.S. provided men and weapons to help put down the Boxer Rebellion in which Chinese citizens attempted to expel foreigners who they viewed as exploitative of their country. The United States did advocate the Open Door Policy, initiated in the late nineteenth century, that prevented the literal break-up of China; however, the motive for that can be seen as greed as much as humanitarianism in that the U.S. wanted to keep China as an open market to which it had access.

The relationship improved again during the lead up to and for the duration of World War II as the United States provided supplies and men to China in its fight against Imperial Japan. Later during the conflict China also served as a launching point for American attacks against Japan. The bond the countries had hammered out during the war seemed to be set in stone when the United States worked to get China to become one of the five permanent members of the Security Council. Once again however, the relationship frayed with the communist takeover of China and with Chinese soldiers actually engaging U.S. troops during the Korean War. At one point the situation was so bad that nuclear war seemed to be a possibility. Relations stayed frozen until President Nixon famously opened up dialogue between the two countries in the 1970s.

Since Nixon’s thawing the two nations have maintained a strong economic relationship. In 2014, China was the United States’ second most valuable trading partner and the United States was China’s top partner. The two sides also recently agreed for the first time to a major environmental pact that is scheduled to cap China’s emissions in 2030 and cut US emissions by 25 percent by 2025. Still though while the U.S. and China are working in concert, many issues remain between the two nations that could potentially lead to conflict, namely human rights abuses and continued Chinese attempts to steal American technological secrets.

Other Considerations

The Price of Friendship

While the complicated relationship between China and the United States may not make China a military threat, the relationship China has with its neighbors in Asia certainly has that potential. Currently China is attempting to exert its newfound power throughout the region. This has led to two separate crises in two separate seas. The one problem in both cases, with Japan in the East China Sea and several Asian countries in the South China Sea, is over control of the seas. Specifically it is over who controls the resources under those seas, particularly the large amount of oil. The video below gives a glimpse of what exactly the issue is.

The reason why all this could lead to China becoming a military threat is because the United States has defensive military treaties with both Taiwan and Japan. Thus if these two nations or others that also have military commitments from the United States were to come into direct physical conflict with China, the United States would be required to come to their aid militarily. The United States could always refuse to honor these obligations, but then that would lead to a loss of credibility.

End of the Pax Americana

Such a loss of credibility may actually already have occurred. Specifically by failing to honor the security commitment to Ukraine and the failure to punish Syria for crossing Obama’s Red line against the use of chemical weapons, hostile countries may now have their doubts concerning American power, or at the very least its commitment.

Not only has this seemingly emboldened countries like Russia, it may also lead other countries with differing political goals such as China to determine the time is ripe for them to assert their own power as well, without the former fear of American retaliation. This may also signal the end of an unofficial era, defined as the Pax Americana or American Peace. During this period dating from the end of World War II, the United States was able to assert its global ambitions due to its military strength.

To Russia With Love

Another potential challenge to the system, crafted by the United States, comes in the form of China’s growing economic relationship with Russia, which has been both a long term and recent nemesis of the United States. While the U.S. and its European allies sanction Russia for its involvement in the unrest in Ukraine, China was agreeing to a $400 billion energy deal that could undermine the sanctions already in place.

China’s Nuclear Card

Even if China were not emboldened by a perceived American decline, it still has the potential to be a threat to the United States or any other state on this planet because of its nuclear stockpile. While China has long maintained its policy of no First Use concerning nuclear weapons, recent improvements in its arsenal may signal its intent to shrink the nuclear capability gap between the United States and itself.

Conclusion

Fool Me Once Shame on You, Fool Me Twice…

Aside from all the spending and rhetoric, good and bad, many still believe that China cannot be a threat to the United States militarily for one major reason: China and the U.S. are each other’s most important trading partners. But this argument has been made before. In one such case it was argued that Germany and France, which prior to WWI were economically independent, would not go to war. This was proven wrong of course and the two sides soon engaged in one of the bloodiest conflicts in human history.

Thus in time China could very possibly become a military threat to the United States with its quickly growing economy and military budget; however, the amount of dialogue and trade between the two countries could just as easily lead to a peaceful and prosperous relationship well into the future. For now only time will tell.