What Government Can and Can’t Do About Birth Rates

M atthew Hennessey, a Wall Street Journal opinion editor who is always worth reading, maintains that while the fall in birth rates is “a big problem in need of an urgent solution,” social conservatives are putting too much hope in “what they call ‘family-friendly’ provisions in the One Big Beautiful Bill Act currently working its way through the Senate.” His cautions are well taken. But I think he’s too pessimistic about their potential impact, in part because he’s thinking about it the wrong way.

He makes four arguments. (1) Other countries’ pro-family policies have failed to raise birth rates appreciably. (2) “Nobody ever had a baby for the tax break.” (3) Culture matters more than government policy: “The solution to this vexing problem is in families and churches, not Congress.” (4) “The best thing the government can do to support families is to give them the gift of a growing economy.”

The foreign evidence is more promising than Hennessey (along with many other commentators) has it. Lyman Stone’s recent review finds that “across a sample of the seventeen most recent national-level, cash-based pronatal policy interventions, there is strong evidence that cash-for-kids works. On average, the interventions increased fiscal transfers to families by about 0.7 percent of GDP and increased fertility rates about 9 percent.”

That result will seem odd if you think of these policies the way Hennessey does: as a bribe for people to have children. It won’t seem odd if you think of them, instead, as ways to encourage people to do something they want to do anyway. In the U.S., surveys have consistently found that, on average, women want to have more children than they actually end up having — the reverse of the pattern often found in developing countries.

Referring to the per-year maximum credit level in the Senate bill, Hennessey asks: “Have you ever met anyone who could be talked into starting a family with the promise of a time-limited, $2,500 partially refundable tax credit?” No. Do I think that people who would like to start a family might find it less daunting to do so if it means a smaller financial hit? And if, because of that improvement in young families’ material conditions, they see more of their peers making a go of it? Yes.

Let’s drop the subject of cash transfers to families for a moment and consider a policy that Hennessey and his Journal colleagues might find more appealing: deregulation that makes it cheaper to build and buy housing. You’re not going to talk people into starting a family by offering them looser zoning rules. Looser zoning rules might nonetheless help people achieve their familial goals.

That culture matters more than policy for family formation is obviously correct, as Hennessey says. It does not follow that better government policies are pointless. They can help at the margin. Which is how we conservatives often think about government policies. When Hennessey says government can give Americans “the gift of a growing economy,” what he means is not that it directly provides good jobs, cheap goods, etc., but rather that it sets background conditions in which an enterprising culture can thrive. He has righted himself rhetorically by the end of his op-ed, saying that government can create “the circumstances conducive to a growing economy.”

It can help foster circumstances conducive to family formation, too. And in practice, we are not facing a trade-off between helping families and promoting economic growth. Every major pro-growth tax initiative of the last 50 years has included pro-family provisions, in part because they consistently compare favorably in popularity to the provisions more favored by supply-siders. The child credit expansion in the OBBB increases incentives for work (and marriage).

Hennessey is surely right to say that the falling birth rate is a complex phenomenon and that we should not expect government to be able to pull a lever to reverse it. But a change in marginal incentives can have salutary effects — a lesson that many of us have learned over the years by reading the Journal.