Immigrants to the Rescue

The stork was busy in America last year. The Centers for Disease Control and Prevention reported 3,985,924 births in 2014, a 1 percent increase from 2013 and the first rise since 2007. At an average of 1.9 births per woman, the country’s fertility rate remains too low to keep the population stable. This isn’t just a problem in the U.S.; around the developed world, families aren’t having as many kids, and that’s a potential threat. The prospects of a rapidly aging and shrinking population are ominous for pension and health-care costs.

If other demographic forces don’t come into play, women need to give birth to 2.1 children on average to keep population constant. This number is called the replacement fertility rate. If women average one girl, one boy, and an occasional extra baby, that accounts for the risk that kids will die before they’ve had kids themselves. Across the wealthiest members of the Organisation for Economic Co-operation and Development (OECD), the fertility rate has dropped from 2.98 children per woman in 1960 to 1.78 in 1990 and 1.66 today, well below the replacement level. If nothing changes, there will be a considerable shift toward smaller, much older populations throughout the industrialized world. Retirees don’t work, but they do consume—drawing pensions and requiring health care. That creates a real challenge for how to support them.