Americans Are Having Fewer Children — This New Study Finds Out Why So Many People Are Choosing Not to Parent

Do you plan to have fewer children than your parents and grandparents? You are not alone. In the United States, the fertility rate has been declining over the past few decades, and one researcher believes this trend is due to rising housing costs.

The rising cost of housing since the 1990s has been an important reason for the decline in the birth rate since then, says Couillard, a doctoral candidate in economics at the University of Toronto, in new research, awaiting peer review.

“If we had not had an increase in housing costs since 1990, there would have been an additional 13 million births, or 11% of the total number of births between 1990 and 2020,” Couillard said. Investopedia. “In the last decade, when there was a significant decline in the total fertility rate, the decline was less, at 51%.”

In 1990, the total fertility rate reached 2.08 births per woman, according to World Bank data. By 2023, it had dropped to 1.62. This is below the “replacement level” (2.1 births per woman), which is the fertility rate required to maintain the current population size.

Why does it matter if the fertility rate decreases? A declining fertility rate can strain the economy, reducing the number of workers who help support retirees through state and federal programs. This includes Social Security, which relies on FICA, a payroll tax collected from American workers, to pay benefits for current retirees.

In his study, Couillard built a model linking housing choices and family decisions using U.S. Census data from 1990 to 2020. He looked at how different types of households — individuals, couples, renters and homeowners — responded to changes in rent and the availability of larger homes. By simulating what fertility rates would have looked like if housing costs had remained constant since 1990, he estimated that rising rents and housing prices led to about 13 million “missed” births.

His model also tested what would happen if larger, family-sized units were built, and found that this could increase birth rates much more than building smaller apartments. That’s why he says we don’t just need to build more housing, we need bigger homes.

“Small units help increase affordability and fertility, and policymakers should certainly take steps to build more small units when opportunities arise,” Couillard said. “But this alone will not have much impact on achieving demographic sustainability or helping people have as many children as they want: we need to build more units with three or more bedrooms.”

Philip Levin, an economics professor at Wellesley University, declined to comment on Cuellar’s paper. But he pointed out that finding out the reason for the decline in the fertility rate was a challenge for economists.

“There are a lot of explanations that people have put forward for why the birth rate in the United States is so low,” Levin said. “For the most part, many of them have not been particularly successful.” “So people talk about things like the high costs of starting a family, raising children, housing, and child care. And it turns out that those things aren’t good explanations.”

However, Levin points out that there is research to support the idea that making homeownership more accessible can boost fertility rates.

“The main reason for the decline in fertility is that each successive cohort begins on a path in which they have fewer children than the cohorts that preceded them,” he said. “Home ownership is often an event that accompanies having children. If newer generations of women and families view home ownership as more difficult, it could change their life plans.”