Economists Still Do Not Know Where Babies Come From

Bryan does not deny that there is a huge problem with his entire approach: we do not know how to explain or predict fertility change. Without understanding what drives fertility, we do not know how to control it—at least not without coercion. The danger of drifting from incentives to disincentives to outright compulsion is not some speculative fear, it is a historical fact, one that has been repeatedly demonstrated over the past century. Even now, those who campaign against reproductive rights use fears of low fertility to argue that women should not be allowed to terminate their pregnancies. And that is why anyone who cares about liberty should be very leery of government schemes to get people to have more babies.

You can find confirmation that economists cannot explain fertility by taking a good, long look at the scholarly literature on pro-natalist policies, which is filled with ad hoc explanations for particular cases and vain efforts to devise a more general theory. Bryan originally offered us one study from Quebec and implied that it showed that small bribes would get couples everywhere to have more babies. Why just this one study? Bryan writes that it was “the highest quality.” Now he cites another study from Austria and a small-scale literature review—presumably of lower quality—as if it proved the point. But there have been many dozens of studies of the impact of government policies on raising fertility, and several large-scale meta-analyses just over the last decade. Considering how crucial this point is for his entire argument, why not look at all the best peer-reviewed research, rather than just cherry-pick a handful that support the idea that we can buy babies on the cheap?

In 2003 a report by Joëlle Sleebos for the OECD looked at research from ten different countries, including eight separate studies from Canada alone. She still had to admit that it was merely a “partial review.” Nevertheless, she came to the following conclusion:

[M]ost studies seem to suggest a weak positive relation between reproductive behaviour and a variety of cash benefits and tax policies. Impacts of family-friendly policies are more contradictory, with several studies suggesting strong positive effects on fertility from higher child care availability but weaker or mixed effects from maternity and parental leave. More generally, however, these studies also suggest that no single “silver bullet” is likely to reverse recent declines in fertility rates in OECD countries.[1]

In 2007, a similarly ambitious analysis of the literature by Anne Gauthier came to much the same conclusion:

The analysis presented in this paper suggests that policies may indeed have an effect on families, but that the effect tends to be of a small magnitude and that it may possibly have an effect on the timing of fertility rather than on completed family size. In view of these results, the popularity of baby bonus schemes among governments, as a way of encouraging fertility, is difficult to understand. While the additional financial support is bound to be welcomed by parents, the overall effect on fertility is likely to be small.[2]

The most encouraging recent peer-reviewed meta-analysis, by John and Pat Caldwell together with Peter McDonald, confirmed that the consensus among researchers is that government expenditures to raise fertility “achieve little or nothing.” It conceded that this was likely true of industrialized democracies, but pointed hopefully to the example of countries behind the Iron Curtain. They appear to have helped stop fertility declines in the 1960s and ‘70s through “massive transfers,” including up to 10% of these communist governments’ budgets. Of course, the real standout was Romania, where Ceausescu imposed severe penalties for abortion, leading to a massive increase in the maternal mortality rate.

Bryan insists that the crimes of anti-natalism are far worse than those of pro-natalism, and describes them as a thing of the past—even though dozens of countries keep abortion unsafe and illegal. Personally, I would rather not tell a Romanian woman who suffered a septic abortion by a quack doctor that she is lucky compared to a Chinese woman who had a forced abortion overseen by Communist party cadres. I do not know how to compare the human cost of pressuring or compelling someone to bear multiple children against their will—and at risk to their health—to that endured by those who felt pressured or compelled to agree to use an unsafe contraceptive or endure assembly-line sterilization. That is why I insist that we must oppose coercive or manipulative population policies regardless of whether they aim to raise or lower fertility.

Fertility is not, after all, a good in and of itself, unlike liberty, prosperity, or good health. Fertility can be a curse for those who wish to avoid childbirth but are left to their own devices. As a society, we should protect the right of couples to decide whether and when to bear children not because we expect every one of them to make good choices. Rather, it is because we have learned that when the state is permitted to manipulate or coerce couples to decide one way or another, the consequences are much worse, and completely unpredictable. Before we join Bryan in bowing down before some new fertility cult, we should think harder about what—and who—we may end up sacrificing.

Notes

[1] Low Fertility Rates in OECD Countries: Facts and Policy Responses, OECD Social, Employment and Migration Working Papers, 15 (Paris: OECD, 2003).

[2] “The Impact of Family Policies on Fertility in Industrialized Countries: A Review of the Literature,” Population Policy Research Review 26 (2007): 339.

[3] “Policy responses to Low Fertility and Its Consequences: A Global Survey,” Journal of Population Research 19 (2002): 17-18.

Also from this issue

Lead Essay

  • Population, Fertility, and Liberty by Bryan Caplan

    Bryan Caplan argues that declining world populations aren’t such a good thing after all. While we may have dodged the “population bomb” predicted in the 1970s, the world still benefits from more suppliers — and demanders — of new goods and services. Friends of scientific and cultural advancement should want more people around. All of which leads him to a question: Are there ways to incentivize population growth without sacrificing individual liberty? Caplan suggests several methods, including open immigration, tax incentives for children — and the direct, ultimately private argument that having more kids is more fun than most people realize.

Response Essays

  • The Ultimate Resource — For How Long? by Gregory Clark

    Gregory Clark argues that, while Caplan may more or less accurately describe the history of economic development, mineral and other reserves in the West have been significantly depleted. What holds true today will not hold true indefinitely regarding food, energy, and basic mineral commodities. The balance between population growth and resources only recently tipped toward abundance, and it will likely tilt in the other direction soon.

    Clark agrees, however, with Caplan’s suggestion that on the margin, middle-class families stand little to lose and much to gain by having more children; cultural assumptions in the West likely overestimate the importance of nurture, and as a result, middle-class Americans probably do overinvest in their children.

  • Pro-Natalism’s Checkered Past by Matthew Connelly

    Matthew Connelly reviews the history of pro- and anti-natalist policies around the world. He finds them both full of coercion, perverse incentives, misogyny, and — if states try hard enough — atrocity. Population trends, however, are very stubborn, and the payoff to such policies is low. In his words, “economists do not know where babies come from.” Not, anyway, such that they can motivate people without destroying their autonomy. If libertarians are recruited to the pro-natalist side, as Caplan urges, their enlisting could come at the price of individual liberty itself.

  • Parents Are Unhappy. But Why? And Should We Care? by Betsey Stevenson

    Betsey Stevenson agrees that parents are often generally less happy than otherwise similarly situated nonparents. But she casts doubt on the theory that excessive parental worry is the source of the unhappiness. The most worrying parents, those who spend the most time on childcare, are also the ones who report relatively higher levels of happiness. There is, moreover, more to life than self-reported happiness, and parents may very well have other desires and values than just this one. Neither self-reported happiness nor economic utility are all that there is to our various ideas of the good life. We still need to learn more about why parents describe themselves as less happy before we can prescribe more children and less worrying as the remedy.

The Conversation