An Interesting New Trend in Fertility

The modern economic theory of fertility dates back to the work of Gary Becker and Jacob Mincer in the early 1960s. They stressed that fertility responds both to changes in a household's income as well as to changes in the "price" of having more children. Mincer, in particular, emphasized these price effects, arguing that the number of children a family would have would fall as women's wages rise. The intuition is obvious: a rise in the mother's wage makes having children more expensive.

This framework, with some minor tweaks, is often used to explain why fertility falls as a country becomes richer. As the country's per-capita income rises, the additional wealth would encourage families to have more children---but the higher price of a woman's time would encourage families to have fewer children. The traditional assumption (supported by data) was that the price effect outweighs the income effect.

But there are a few signs that we may need to rethink some of these ideas. This is from a recent NPR report:

The newest status symbol for the nation's most affluent families is fast becoming a big brood of kids.

Historically, the country-club set has had the smallest number of kids. But in the past 10 years, the number of high-end earners who are having three or more kids has shot up nearly 30 percent.

Some say the trend is driven by a generation of over-achieving career women who have quit work and transferred all of their competitive energy to baby making.

They call it "competitive birthing."

I don't know if the rise in the number of children among more affluent families is due to "competitive birthing" or not. But the data, and many anecdotal observations, clearly suggest that there's something going on.

It is not unusual, for instance, to find families in the Boston suburbs where the mother has an advanced academic degree, obviously can earn a high wage in the labor market, but has instead decided to be a stay-at-home mom for a brood of 3 or 4 children. I would not classify these families as part of the "country-club set." These families are often making a substantial financial sacrifice.

Some interesting questions: Why does the high price of a woman's time seem to be less of a deterrent to having more children these days? And is this only a U.S. phenomenon?

Comments

[King Rat]

Once a family gets into rarified income atmosphere, it would seem to me that the marginal value of money to them becomes less than it is to a middle income earner. They may be sacrificing a lot, but they still aren't sacrificing the ability to live well.

[Half Sigma]

When there is a very big income disparity between husband and wife, it doesn't make any economic sense for the spouse deficient in human capital to work for such low wages relative to the other spouse.

[balancing act]

One factor in women opting out is the challenge of finding satisfying work that also offers flexible working hours and/or a reasonable commute.

Having (more) children because one can afford to, not because one has to or because one does not know how not to, is a win-win!

As a working woman who has spent a lifetime on the mommy track, I applaud these women. (So long as they manage to keep themselves employable, and intellectually challenged.) I wish my husband and I could have afforded to have more than the two kids that we allowed ourselves.

[Biomed Tim]

The NPR report isn't necessarily consistent with your anecdotal evidence:

"the nation's most affluent families" aren't the same thing as "mothers with advanced academic degrees."

[Half Sigma]

Close to 100% of affluent people have at least a bachelor's degree.

Getting another degree after that, if nothing else, is entertaining for people who don't need to work. But in our modern society, for most lines of work, the credential of an advanced degree is necessary for most meaningful work. Even school teachers, in most states, are required to get a graduate degree.

[megan adams]

The USA is a punishing environment for families. Professional life is unforgiving and unsupportive of the work of caring for a family. Under these circumstances, the rewards of children are experienced more often by the well-off. There was an article in the WaPo (can't find it) not long ago on the effects of insecurity and low wages on marriage rates - basically marriage itself is becoming more and more an upper middle class institution. Those who are more exposed to the rigors of the American system don't have the stability to risk it.

People don't need to be rich to have a bunch of kids, they just need enough, and they need some stability. The folks you describe have that. They may be giving up luxuries, but they're not endangering themselves, sacrificing retirement income for example, by spending money on their kids.

If you want to know how to encourage fertility, look at family policy in France.

The truth is, the educated middle class in this country is shrinking because it's just too hard here to do the work of raising the next generation.

[T]

This phenomenon has been talked about for a couple of years. I think the WSJ had it before.

My guess is that women of this generation, of which I am one, are more confident than the previous generation that if they want to get back into the workplace they will be able to do so at some point, whether rich or not. They might be more confident of their ability to find something interesting after they raise their kids.
That and there are always cycles between beliefs--"women must stay at home until the kids are 18 if they're good mothers" to "women can become partners at the firm and have 15 kids". Maybe it's because of demographics; back in the 1970's and 1980's more traditional women were more likely to have kids (I would guess) and the well educated of today are more likely to come from traditional women than in previous generations when all women had kids. Maybe it's just a transition in thinking.

[Mario]

I'd like to believe that they are finally realizing that the long-term benefits of raising multiple children outweigh the short-term costs, but that's probably not the reason.

It might happen, though, for the same reason that men take multiple wives (in societies that allow for such a thing). It is a sign of affluence that you can afford to do what others would not be able; support a larger than average family.

[David]

A mother that stays at home also has the practical option of homeschooling her kids. The economics of that choice are very attractive for large families when the next most attractive alternative is private schooling.

[AgingITGuy]

There are undoubtedly many reasons. Among them are

1) Job Burnout - the workplace is becoming stressful.

2) Pampered Kids - kids seem to be living more 'structured' lives which require more intervention (transportation, etc) from parents

3) More non-traditional work options -- businesses are more accepting of telecommuting, part-time work, job sharing, etc in their professional staff. Also, the Internet has facilitated many new options for self-employment (E-bay, etc)

4) Help -- More families hiring household help?

[Garett Jones]

I suspect AgingITGuy's #3 and 4 are quite significant:

#3: IT makes it easier to break work into bite-sized pieces--for both the primary child-rearer and the secondary child-rearer.

Disposable anecdote: A Dad sitting next to me at his kid's baseball game texting away on his Blackberry.

#4: With lots of cheap labor around, it's easier to outsource a lot of the boring parts of childrearing--driving kids around, cooking massive meals, cleaning, helping with homework.

A society with lots of wage inequality makes this much easier--there are always low-wage workers around to do the boring stuff. So a rich parent today can probably outsource whichever parts of parenting he or she hates most!

[K]

Instead of devoting 100% of their energy to either raising kids or having a career, many women are finding that this is not a zero sum game. Of course, there are some tradeoffs that do result in less for one side or the other. But, the idea that staying at home with your kids is the "best" is no longer wholeheartedly embraced. Many women feel that they can do a better job parenting when they have an identity other than just being a mother. Imagine spending 24 hours a day with your child versus 2 in the morning and ~4 in the evening (or whatever...). If I only have a few hours per day to spend with my child, I will make the most of that time, whereas if I have the entire day, I will be counting down until bedtime. There are also issues (debatable) about a mother's productivity...personally, I am more productive while I am away from my child because I want to get the most out of my work time so that when I am with my child I do not have to worry about work-related issues. I am a better parent because of my work and I am a more productive worker because I am a parent.
I have an advanced degree and I feel that it is important for me to work outside the home to be a good mother and set a good example for my children. I don't see why I can't have my cake and eat it too. I have found great synergies between house and non-house work, and I think other women in my generation have as well. Perhaps more women are gaining this kind of confidence that encourages more than 2.1 kids...

[Andy Cheng Zheng]

I guess it's already been spreaded to Asain countries like Singapore and China. There seems to be a tradeoff between career and family. High-achieved women in these countries tend to have less babies, or even not married yet.