Press "Enter" to skip to content

Will America’s Low Birth Rates Cause The Economy To Crash?

Birth rates in the U.S are at their lowest levels in three decades. As a result of fewer babies being born, diaper sales are down 6% and the impact on the economy is evident. With retail sales down, Kimberly-Clark, the manufacturers of Huggies diapers and pull ups, has already revealed plans to lay off 13% of its workers and close 10 of its manufacturing centers in a bid to cut costs. So, as more and more American retailers cease trading, could America’s low birth rates really be to blame?

Why birth rates have slumped

In 2017, it was estimated that the average U.S woman’s ‘total fertility rate’ dipped to 1.76, down from 2.12 in 2007. One reason birth rates have dropped is due to fewer teens having babies. Two decades ago, teens in Arizona were giving birth to 12,000 babies a year, but that number has now more than halved. A common reason why so many teens were having babies was due to contraception not being readily available or female contraceptives not working as expected. However, the state and the rest of America intervened by ensuring youngsters received effective sex education. The recession is also to blame as an increasing number of individuals are put off from starting families due to finances being tight


The impact on the economy

The long term effect on the economy if birth rates remain as they are or reduce further is that there will be a shortage of people to fill vital job roles in areas such as health and social care. It’s predicted that by 2050, 22.1% of the population will be aged over 65, according to Statista. Many of these individuals will require care in some form, but the number of individuals to take on the role of carer will be limited, meaning resources will be stretched and standards of care will be lower. 

A positive move

It’s not all bad news for the economy, though. Fewer babies mean people are choosing to have children when they are financially ready and when they can be sure that they can provide a stable home for their child. Elizabeth Wildsmith from Child Trends explains that this is more beneficial to children, stating “The evidence suggests that kids tend to do better when they’re born into situations where they’re a little bit more stable and that is more likely to be the case when parents are able to finish school and be in jobs that have higher wages.”

Declining birth rates in America has led to several well-known baby brands fighting plunging sales and cutbacks. While fewer births can and have impacted the economy negatively, there are benefits to be had too. Therefore, it’s important that the government don’t push to increase birth rates too substantially as this could impact the well-being of a whole generation.