Leading economists have been warning for decades that a shrinking population spells significant turmoil for our economy and broader society. This is not a problem exclusive to the United States either – for example, South Korea, a country with one of the lowest fertility rates, is offering new parents cheaper mortgage rates to encourage them to have children (at 1-3% lower than commercial banks), as well as several other initiatives.
High inflation has long been identified as a deterrent to couples having more children, which is understandable. The more expensive the cost of living, the less likely people will want more children they need to financially support. And although inflation is continuing to ease, it still sits at over 3%, meaning that the overall measure of prices for a broad range of goods and services is 3% more than a year ago.
Though analysts see it as a positive forecast, the effect of the high cost of living over the last couple of years has had a significant effect on family planning among young couples. That is, according to a study by MadeintheUSASurrogacy.com, who ran a survey of 3,000 childless couples across each state, asking them how many children they would like to have in the future. The survey revealed that on average, each couple would like to have 1.8 children, which is lower than the current average of 1.94. While this discrepancy might seem minimal, it signifies a considerable decline when scaled to the national level.
While a common assumption is that a falling population will be better as it might lead to reduced demand for scarce resources, economists warn that America could face multiple economic challenges if couples here choose to have less children. A falling population results in a smaller labor force, which can stifle economic growth, cause labor shortages, particularly in labor-intensive sectors, and reduce overall consumer demand. Additionally, an aging demographic is often associated with a declining population, leading to increased healthcare and pension costs, straining public finances. It may also reduce the tax base, making it difficult for the government to maintain public services and infrastructure. On the real estate front, decreased demand could lead to falling property values. Education and innovation might suffer due to less demand for educational services.
However, environmental benefits might emerge through reduced strain on resources and lower carbon emissions. Various factors can influence these effects, including immigration policies, the speed of population decrease, government policies, technological advancements, and the state’s economic structure.
Diving deeper into the survey data, MadeintheUSASurrogacy.com made some interesting observations.
Couples from forty-five out of 50 states said they intend on having less children that the current state average. Only couples from New Hampshire, New Mexico, Illinois, Indiana and Massachusetts bucked the trend. New Hampshire and New Mexico couples intend on having more children (0.5 and 0.1 more respectively) and couples from Illinois and Indiana stated they intend on having the same number of children as the current state average.
Based on the data, it appears Alaska is set to experience the most significant population plunge in America. Based on Census data, Alaska is the 3rd least populated state in America (733,391 people), only behind Wyoming and Vermont. Couples surveyed in Alaska said they would only want to have one child – a swing of -1.3 compared to a current state average of 2.26. Proponents of having larger populations might be disappointed with Alaska’s results, given that it is one of the few states with more than 2 children per family.
As previously states, New Hampshire (along with New Mexico) is one of two states set to experience population growth, with respondents here saying they would like to have 2.3 children – a +0.5 swing.
The top 10 states with the largest expected population plunge:
1. Alaska: -1.3
2. Delaware: -1.0
3. Nebraska: -0.9
4. Idaho: -0.9
5. Arizona: -0.7
6. Wyoming: -0.7
7. Tennessee: -0.6
8. Iowa: -0.6
9. West Virginia: -0.5
10. Hawaii: -0.5
