The Luxury of Children

The world’s fertility crisis is more severe than is commonly understood. Last year, humanity’s total fertility level dropped below what demographers call the replacement rate—that is, the average number of children that a woman must have to keep a population constant over the long run. This has never happened before. There have been periods when the human population declined because of wars or epidemics, such as the Black Death, in the fourteenth century, or the diseases brought by Europeans to the Americas in the fifteenth and sixteenth centuries. But now, simply as a function of their choices, humans will see the world population peak around 2055 and then begin to fall. The story of the coming decades is not simply one of dwindling and aging. There is a great deal of variation in the baby bust. The most surprising trend may be one that has overturned basic assumptions about fertility rates. Where once it was thought that people—and, by extension, countries—with higher levels of income and education would have lower fertility rates than those who were poorer and less educated, the inverse is increasingly true. Many wealthier people and countries boast higher fertility rates than many poor people and countries. The inversion is revealing of why governments have had a hard time coming to grips with the fertility crash. The best explanation for why people are no longer having babies is that child-rearing at the scale necessary to maintain populations is fundamentally at odds with the structures of modern life and modern societies. Once an economic necessity, children are now an economic luxury. That portends a world in which economic inequality is accentuated by demographic inequality, with widening fissures within countries and among them. The whole world is grappling with a decline in fertility, but in many different ways. And those differences will stoke further divisions, tensions, and even conflict. THE CRASHHumanity falling below replacement has passed largely unnoticed. The central projections in the latest release of the United Nations World Population Prospects (in 2024), known as the report’s “medium variant,” still places the world’s total fertility rate slightly above replacement in 2026 and expects the global population to peak as late as 2084. But this medium variant does not fully incorporate the recent drops in births recorded by national statistical agencies, and its projections for future fertility rest on questionable assumptions, including forecasting a strong recovery of fertility rates in countries such as China. By comparison, the report’s “low variant” (the forecast that takes a more pessimistic view of future fertility) accords nearly exactly with my own assessment, which reflects more recent national statistics and takes a less optimistic view on the possible recovery of fertility. In that reading, the world has dropped below replacement fertility levels (approximately 2.2 children per woman) and will only keep dropping. Fertility rates are plunging so fast that they are overturning many assumptions about demography. The steepest fertility declines have occurred in unexpected countries. Consider this test. Pick the state with the highest fertility rate among the following: Argentina, Brazil, Chile, Colombia, Jamaica, Iran, Malaysia, Thailand, Tunisia, Turkey, Sri Lanka, and the United States. The United States, the wealthiest of the 12, has the highest fertility rate. This holds true even when just assessing the fertility rate of mothers born in the United States (immigrant mothers have a slightly higher fertility rate than native mothers). Dozens of other middle-income countries now have fertility levels below that of the United States. That trend runs against the old explanation for demographic change, which held that fertility invariably falls as a community or society gets richer. That is demonstrably no longer the case. Among the countries in the Organization for Economic Cooperation and Development (OECD), richer members tend to have higher fertility rates than do poorer ones, even after controlling for migration flows. Take Mexico. According to the most recent survey, in 2024, a Mexican woman could expect to have 1.2 children over her lifetime, well below the 1.57 average of non-Hispanic white women in the United States. Mexico’s income per capita is only about 28 percent of the U. S. level. And just two decades ago, fertility rates in Mexico were much higher than those in the United States. This dynamic obtains not just among countries but also within them. Richer and more educated households in the United States and other advanced economies now tend to have more children than poorer and less educated ones, reversing a pattern that had held for centuries. There is no single, simple answer for why this has happened. Most theories do not hold up against international evidence. Factors that seem to contribute to lower fertility in the United States, for instance, such as higher housing prices, don’t seem to matter elsewhere, as many countries have seen even steeper fertility declines without skyrocketing housing prices. Or take another favorite culprit, smartphones. Some researchers have suggested that the spread of the smartphone stoked atomization and a desire for individual fulfillment, discouraging many people from having children. But fertility rates have been plunging worldwide since the late 1960s, well before smartphones appeared, and there is little evidence of an acceleration in the drop after their introduction. Instead, the device is more likely an accelerator of underlying mechanisms than a cause in itself: by my calculations, smartphones compressed into ten years a change in fertility that would have occurred anyway over 25. Another common explanation for drops in fertility is the spread of female education and employment. Freed from the domestic function of birthing and raising babies, the argument goes, women have chosen to prioritize other goals instead of child rearing. Although that shift may indeed have played a role in the twentieth century in lowering fertility rates, it is no longer so clearly causal today. Indeed, across OECD countries, the correlation between fertility, on the one hand, and female education and employment, on the other, is positive: the countries where women are more educated and more likely to work outside the home are also the countries with higher fertility rates. And in other regions for which demographers have good vital statistics, such as Latin America, the women not having children in 2026 are the least educated and the ones most likely to not be part of the workforce. MODERN LOVEIn the absence of neat, definitive explanations, a broader explanation for the global fertility crash comes into view. As societies embrace what is often termed “modernity,” they become incapable of maintaining replacement-level fertility rates. Modernity describes how countries have organized contemporary life around formal institutions (such as schools, universities, and health systems), specialized expertise (through degree accreditation, standardized exams, and professional licensing), and large-scale systems of coordination (such as multinational corporations, governments, and global supply chains). It is not synonymous with capitalism; communist countries, too, invested heavily in mass education and bureaucracies (and saw concomitant declines in fertility). The only way to run large, complex societies that harness modern technology at scale is to standardize knowledge and detach it from local custom through mass education, systems of expertise, and bureaucracies. Modernity raises the cost of children and lowers the cost of childlessness. Parents must equip children with formal knowledge and credentials, an endeavor that takes decades of effort and spending. Tight career schedules also conflict with parents’ biological clocks. The most productive years for a research economist, for example, are usually between 30 and 45. Those are also the years when one needs to spend the most time with children. No matter how much accommodation a university offers, the day still has only 24 hours. Even when a researcher manages to produce both a large family and strong academic output, one can always wonder how much more that researcher would have produced with a smaller family. And modernity has also made it easier not to have children. In traditional agrarian and artisan economies, children were useful factors of production, helping in the fields and workshops. Children also provided parents and other older relatives with eldercare. But the modern organization of economic life no longer requires children to perform those roles and the advent of welfare states has given the elderly other forms of support. Lineage once determined people’s present and future; it no longer does so in such a comprehensive way. There are some exceptions to this seemingly universal trend. Tight-knit religious communities, such as the ultra-Orthodox in Israel and the Amish in the United States, have managed to maintain high fertility rates well above replacement level. But these groups have also stayed apart from much of modern life. For example, the Amish live in rural areas, where housing is much cheaper, and they end formal education at eighth grade, which eliminates one of the main costs of raising a child in a modern society, advanced education. THE BABY FLEXApart from these idiosyncratic pockets, modernity has spread around the planet, with fertility falling everywhere. But rates are tumbling unevenly. In 1980, the richer an OECD country, the fewer children its women had. By 2000, the opposite was beginning to become true. The same reversal shows up inside countries. In Sweden, the demographer Martin Kolk has found that in every cohort born between 1940 and 1970, men with higher lifetime incomes have more children, and that among women born since the 1960s, the poorest have the fewest children. In the United States, the economists Moshe Hazan and Hosny Zoabi have found that in the first decade of the twenty-first century, women with a graduate degree had about 2.0 children, significantly more than the 1.8 for women who stopped at a bachelor’s degree. Many adults still want to have children and flourishing families. When Gallup asked Americans about their ideal number of children in July 2025, the average answer was 2.7, a figure that has barely changed since the 1970s. But children are costly and bring no income. They have become something of a luxury good that richer people can afford more of than poorer people can. In the same way that a richer household owns, on average, a more expensive car than a poorer one, it also has more children—at least since the 1990s. Prosperous parents can hire help at home, order prepared meals, pay for premium grocery delivery or laundry services, and afford tuition and tutoring. Richer families (and, among them, the most educated parents) also have more stable family lives. For instance, among Americans born between 1957 and 1964 (a cohort whose adult lives can be observed almost in full), about half of men with a high school diploma but no college education had seen their first marriage end in divorce by age 55, compared with 27 percent of men with a bachelor’s degree or more. Stable families lead to higher fertility (and much better outcomes for the children). In short, income and education soften some of the worst consequences of modernity. The intuition of this result applies, as well, to countries as a whole: richer countries can, on average, afford more “luxuries,” including children, than poorer countries. If the modernity conjecture is right, the flip in the correlation between income and fertility that is evident within OECD countries will extend to all other countries over the next few decades. This is already happening in the Americas: among countries with at least 20 million inhabitants, the United States has the highest fertility rate in the hemisphere, well ahead of Argentina, Brazil, Canada, Colombia, and Mexico, and matched only by Peru, whose fertility rate is plummeting fast. (Venezuela’s official fertility rate is pure fiction.)The same phenomenon will occur in sub-Saharan Africa over the next few decades. It is often projected that the continent’s high fertility rates will make up for shortfalls elsewhere—but that will likely not happen. Indeed, in those sub-Saharan African countries for which demographers have slightly better statistical data, fertility rates are dropping very quickly. For example, a recent household survey in the Republic of Congo has shown a decrease in fertility from 5.1 children per woman in 2011–12 to 3.5 in 2025. Similar falls are happening elsewhere and likely to accelerate as sub-Saharan Africa succumbs to the same factors that have sped fertility declines elsewhere. FACING THE SUNSETThe coming years will produce deep changes in populations within countries and across countries. The already sharp divide between regions and social groups with higher average incomes and education levels and those with lower average incomes and education levels will grow more pronounced, with the added dimension of contrasting fertility rates. The school district of a wealthy suburb outside a major East Coast city may not need to grapple with the widespread school closings that urban districts are already experiencing. And since political power in a democracy follows, at least to some extent, the number of voters, these different regions and social groups will see their relative influence in American politics change: New York, for instance, has lost 19 votes in the electoral college since the 1940s. Something similar can happen among countries. In 1972, nearly eight times as many children were born in China as in the United States. In 2025, that figure has dropped to 2.2 times as many. China’s total fertility rate in 2025 was 0.93, while the U. S. rate was 1.58. If fertility rates remain at those levels, the United States will overtake China in annual births at some point in the 2080s and in total population by around 2120. That date might arrive earlier if the gap between the fertility rates of China and the United States continues to widen. Demography is not necessarily destiny, but a world in which the United States has a larger population than China is very different from the world today. The shrinking and aging of populations will have first-order effects on a country’s economic performance. In research with Gustavo Ventura and Wen Yao, I have documented that nearly all of Japan’s poor economic performance relative to the United States since 1990 can be explained by its worse demographics, not by financial crises or poor economic policy. Among the great powers, the United States is the least exposed to demographic headwinds. Younger populations tend to be more innovative and less reliant on public support, a fact that bodes well for American prospects in the competition to come. But for most other countries, demographic decline will produce significant problems. Aging Japan, for instance, is likely the best-case scenario for countries reaching a demographic sunset. It boasts a capable state and a homogeneous society with a high degree of consensus. More important, Japan became rich before it got old. Countries such as Mexico and Thailand, which lack many of Japan’s advantages, may struggle to weather the same demographic headwinds. While rich economies can rely on immigration to soften some of the effects of falling fertility, countries such as Tunisia or Bolivia, which lose many people to emigration, may find it harder to deal with their own baby busts. The new dynamics of fertility augur a world in which gaps between the haves and the have-nots grow even wider, as poorer countries and communities endure strains that wealthier countries and communities manage to escape. WE’RE ALL EAST GERMANY NOWShort of an unlikely turn to the social mores of deeply conservative and ideological communities, such as the Amish, only transformations in material circumstances will help raise fertility rates. Governments have had a hard time determining how to tackle fertility decline. Policy can do only so much in convincing people to make the monumental decision to have children. But that does not mean that governments should not try to reverse these trends. Their policies should respect the freedom of citizens to form the families they believe are best for them. Ultralow fertility seems to be caused not by a lack of desire for children but by the absence of the conditions that would make having children easier, or even possible. In this vein, some policies are no-brainers. Governments should make education systems more accessible and less competitive than, for example, the ones found in East Asia and in the United States, where high levels of cost and stress discourage having children. They should build more affordable housing and provide more affordable childcare. Such material changes may have only a marginal impact on rates, but even, for instance, raising the U. S. total fertility rate to 1.7 from the current 1.58 would produce a significant impact. Fertility rates behave like the rates of return on a retirement fund: small yearly differences accumulate into large differences over time. Policies that give people greater material freedom to have children can thus be very consequential in the long term. If governments fail to enact these policies, and if, indeed, these policies fail to encourage a broader rise in fertility, the world will simply become more unequal. Richer families and richer countries will gain greater weight in the population, while poorer families and poorer countries dwindle and weaken. These shifts will create political tensions, as shrinking populations will add to their relative poverty the desperate sense that they have no demographic future. Eastern Germany offers a preview. Since reunification, its young people (above all, its young women) have left for western Germany, its towns have emptied and aged, and its voters have turned to the parties at both extremes of the political spectrum. Many countries in the world are about to become eastern Germany, but few of them will have a western Germany to pay the bills. Demographers often suggest that the world is united by the crash in fertility rates. In truth, demographic decline will likely divide the world even further.