Entitlements vs. Kids

by Ramesh Ponnuru

Over at Big Think, David Berreby comments on my recent NR essay about the by now well-documented tendency of old-age entitlements to reduce the number of kids people have. He is sympathetic but skeptical:

It could be a convincing argument, except for one fact: Fertility (defined as the number of children per woman of childbearing age in the population) has been dropping worldwide for half a century. It has dropped in nations with welfare states. It has dropped in nations without. . . . 

It could be that welfare states add more momentum to a universal trend. But for that to be true, fertility rates should be inversely correlated with the generosity of benefits in nations around the world.

They aren’t: Germany has a generous social welfare program, and its fertility rate in 2010 was 1.4. But Norway and France, which also have cradle-to-grave protection by American standards, are very close to the 2.1 “replacement rate” at which a developed nation’s population stays stable. 

I deal with Berreby’s first fact in the essay by acknowledging the obvious point that fertility has declined for reasons other than the growth of old-age entitlements. His second point is also irrelevant to my argument, because it’s a non sequitur. Yes, you’d expect larger old-age entitlements to be associated with lower fertility, all else equal, but there’s no reason to expect that in the actual world all else will be equal. So, for example, a country that starts with a cultural preference for large families may end up with larger families than a country without that preference, even if entitlements are larger in the latter country. The studies I cited recognize these complexities and deal with them as best they can. Their verdict is, nonetheless, that old-age entitlements tend to reduce the number of children in a society, and the larger those entitlements the bigger the reduction. Which, for reasons outlined in my essay, is exactly what you’d expect.

Berreby’s commenters raise additional criticisms, which my article generally pre-empt. I do not, however, answer what one could take to be the implicit argument of some of the commenters: that we ought to have a government policy to discourage people from having kids. I disagree. If we as a society want to have such a policy, though, we should at least adopt it with both eyes open rather than as an accidental consequence of large entitlements.