Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
In 2015, the US government came up with a calculation that estimated how much it would cost to raise a child from birth to the age of 18. In today’s money the total would be over $315,200. Meanwhile, the federal government under Donald Trump is mulling a range of options to increase the birth rate, including paying a birth bonus of $5,000.
Given that the estimated bill doesn’t include university costs, prospective parents had better hope that they are raising a mathematical prodigy. But you don’t need to be a prodigy to understand why a $5,000 baby bonus is not going to provide any sort of meaningful incentive.
That $310,000 gap embodies the huge hole in so much “pronatalist” policymaking: an obsession with the process of child rearing that is paired with at best indifference, and in some cases outright contempt, for the lives and the bank balances of the parents who have to raise those children.
Even when politicians attempt to support parents, they can introduce new problems. One of the other mooted US policies is that 30 per cent of places on the study abroad Fulbright scholarship programme be reserved for parents or married couples. But who, exactly, will be looking after these children when their parents are studying, and will the cost of that childcare be more, or less, than $5,000?
Whether the cost of raising children is direct, because both parents keep working and must pay for care, or indirect, because one parent (often the mother) gives up working and sacrifices their salary to do so, if your wizard plan to get birth rates up is to hand out a mere five grand, you need to think more deeply. Even generous countries like Norway come nowhere near matching the actual cost. In the UK, child benefit is capped at two (below replacement rate), while the most economically successful parents receive nothing at all.
Across the rich world, a great deal of “pro-natal” policy appears to be the result of discussions between those who see pregnancy and birth as the end of the story. But very few parents think only about what happens in the maternity ward. They are thinking about the life of their child, how they will provide for them, where they will live and what will happen to their job prospects.
Because so many of these questions are neglected by pro-natalists, serious policy ideas that might help working parents, particularly mothers, are wholly absent. The implied, and sometimes explicit, argument is that women should give up work, or at least advancement, in order to raise children. (Presumably that is how the Fulbright scholar will be able to focus on their work — their partner will be changing the nappies and doing the school run.)
For most of us, our partner’s success is, at least in part, our success. It is a key contribution to the holidays we can afford to take, the homes we can afford to buy, and it adds an element of relief from stress and worry to be in a house with two earners and not just one.
That household story is mirrored across the economy: even if you think concerns like “women are human beings with agency and should be treated as such” are a sign of excessive wokery, I have bad news for you. The entrance of women into paid work has become economically load-bearing not just for individual households but for most western societies. Doing without that contribution is not an easy option.
If governments want to increase birth rates, they need to do things that will shift the calculation and the balance of incentives for raising children (if parents are lucky, this is an 18-year financial commitment, but one that could run for the rest of their lifetime).
They also need to think more carefully about the people who are not having children. The big fall-off in much of the rich world is lower birth rates among teenage girls and women in their twenties. It is largest among working women and professional couples.
Reducing teen pregnancy to negligible levels has been a major public policy success that we would not wish to unpick. It is the missing children of people in their twenties who might want to have them that are worth thinking about.
That leaves policymakers with two options: doubling down on economic incentives for parents in general and women in particular to have children earlier, including making it easier for single women to raise children alone, and/or invest in ways that extend fertility later in life. In either case, they must start by asking what serves the interest of the people raising children. Birth rates are not something you can fix by handing out small sums of cash upon delivery.
Source link
