Thursday, August 12, 2021

U.S. Population Growth, an Economic Driver, Grinds to a Halt

Covid-19 pandemic compounds years of birth-rate decline, puts America’s demographic health at risk

By Janet Adamy and Anthony DeBarros of the WSJ. Excerpts:

"America’s weak population growth, already held back by a decadelong fertility slump, is dropping closer to zero because of the Covid-19 pandemic.

In half of all states last year, more people died than were born, up from five states in 2019. Early estimates show the total U.S. population grew 0.35% for the year ended July 1, 2020, the lowest ever documented, and growth is expected to remain near flat this year."

"What concerns demographers is that in the past, when a weak economy drove down births, it was often a temporary phenomenon that reversed once the economy bounced back."

"Yet after births peaked in 2007, they never rebounded from the nearly two-year recession that followed, even though Americans enjoyed a subsequent decade of economic growth.

With the birthrate already drifting down, the nudge from the pandemic could result in what amounts to a scar on population growth, researchers say, which could be deeper than those left by historic periods of economic turmoil, such as the Great Depression and the stagnation and inflation of the 1970s, because it is underpinned by a shift toward lower fertility."

"This year, the U.S. will record at least 300,000 fewer births because the uncertain economy and the pandemic dissuaded women from having babies, according to projections by economists Melissa S. Kearney and Phillip Levine. Provisional government data already show births in the first three months of 2021 declined compared with 2020."

"Extended financial insecurity among young adults and women’s rising educational attainment are among factors overlapping with the pandemic year’s health and financial shocks"

"The declining rate of Covid deaths will also help ease the problem, but the U.S. still faces other pressures on mortality. A sharp rise in drug-overdose deaths and an increase in fatalities from homicides and some chronic diseases last year helped drive down U.S. life expectancy by 1.5 years, the largest drop since at least World War II."

"Every type of U.S. county, from the most urban to the most rural, on average saw a decrease in the number of births per death in the second half of the 2010s compared with the first half"

"Historically, nearly half of the country’s economic growth has been driven by the expansion of the working-age population, including immigrants, said Neil Howe, an economist, demographer and managing director at Hedgeye Risk Management, an investor-oriented research company. Recent federal-budget projections suggest the potential labor-force growth rate will hover just above zero for years to come, down from a range of 2.5% starting in the mid-1970s to 0.5% from 2008 through last year.

The shifts will make the U.S. more reliant on immigration to grow the workforce, economists say, although that faces its own pressures. Mexico’s fertility rate has steadily declined, while China and India—two other top suppliers of immigrants to the U.S.—face talent shortages of their own, along with China’s own flattening population growth."

"Among the industries most affected are retail and hospitality, because they rely on younger workers who turn over quickly, said Rob Sentz, who until last month was chief innovation officer at the labor-market data firm Emsi. Sectors such as healthcare, engineering and information technology will struggle to replace senior management as millions of baby boomers retire.

Over time, a lower fertility rate will lead to a higher ratio of retired beneficiaries to taxpaying workers, which is expected to raise the cost of Social Security and Medicare.

The Biden administration hopes to support family growth through its proposed $1.8 trillion American Families Plan, which includes paid parental leave, subsidized child-care and free preschool. Such policy approaches have had a mixed record of lifting fertility rates in other countries, researchers say."

Related posts:

A number of women who put off having babies after the 2007-09 recession are forgoing them altogether; more educated women and student debt also contribute to decline in birth rates (2018)

Births in U.S. Drop to Levels Not Seen Since 1979 (2021)

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