Blue State Socialism & the Economy-Fertility Connection (Part 1)
By RedShift Comments (11) / Email this page » / Leave a comment »
In several of our previous posts, we identified a causal link between the economic condition of Red States and the migration of the US population to those states. Readers have attempted to link the migration to climate, but this study proves that it is still taxes—and not climate—that drives people to vote with their feet.
Now in this ongoing discussion on fertility levels in Blue and Red States, an interesting, but invalid, connection is asserted: higher income leads to lower fertility. One reader suggested the connection, as did The Economist in its article, Demography and the West:
Nearly every country in the world has seen its fertility rate fall recently and, by and large, the richer the country, the greater the fall.
The Economist identified America as a demographic outlier because of our sustained replacement-level fertility rate. But The Economist has assumed that the connection is wealth-related and not market-related, which we believe misses the underlying issue. Thus, America is considered a puzzling inconsistency. But considered another way, the fertility rates are perfectly consistent, and the phenomenon can be seen manifesting itself at the state level as well as the national level. For example, we noted here that Canada had above replacement level fertility until it established its "impressive welfare state," after which, Canada's fertility rate plummeted.
In that light, perhaps a more accurate statement by The Economist would have been:
Nearly every country in the world has seen its fertility rate fall recently and, by and large, the more socialist the country, the greater the fall.
This would explain why Canada's and Australia's fertility rates are low, while America's remains at replacement levels, and Estonia's is finally recovering after establishing free-market capitalism as its economic system.
As evidence that fertility is directly correlated to the economy (and not inversely correlated to income as some have asserted), consider California's fertility rate since 1980 (see figure, below).
We recall the economic boom of the late 1980s after Reagan's tax cuts, and when the economy recovered, so did the national fertility rate (in red in the figure). But due to defense spending, California did especially well, and its fertility rate (in blue in the figure) skyrocketed along with the economy. But the good times did not last, and the early 1990s were not kind to California. The recession in the state was severe:
[There was] a major downsizing of the state’s aerospace industry and reductions in Department of Defense payrolls. To make matters worse, the state was plagued with a series of natural and manmade disasters that further tarnished the Golden State’s image. These factors resulted in a much longer and far deeper recession than the rest of the nation.
As went California's economic fortunes, so went its fertility rate. Despite the economic recovery in the state and the rest of the US in the late 1990s, California's liberal policies, high tax rates, and Gray Davis, had driven 2.2 million of the state's most productive and reproductive citizens out of the state, and California's fertility rate was dropping back below where it had been before the Reagan boom, even while the rest of the country's fertility rate was on its way back up again.
Our point is only this: If The Economist was correct and fertility rates decline with wealth, California's fertility rate should have declined dramatically during the economic boom of the late 1980s, but instead it skyrocketed to well above the national levels. Likewise, as the economy turned south and began to stagnate, the fertility rate should have risen, but instead it dropped precipitously. Thus, we see that fertility is a phenomenon driven by optimism and economic prosperity, and not merely by a nation's wealth. Socialism diminishes fertility and free-market capitalism increases it. Free-market, supply-side prosperity makes people want to have more children, while socialist, centrally controlled high tax markets make people less inclined to reproduce.
For the reader's interest, we note that the National Center for Health Statistics (NCHS) reports that fertility is on the rise in Red States:
Fertility rates also vary considerably among states, ranging from 51.0 births per 1,000 women age 15-44 years in Vermont to 90.4 in Utah. General fertility rates for most states changed relatively little between 2004 and 2005, ... however, rates for 16 states increased significantly (Alabama, California, Florida, Iowa, Kentucky, Missouri, Nevada, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming)…
As we have often noted, Red State fertility is not a hard fast rule, and thus California, Pennsylvania and Wisconsin occupy the list along with 13 Red States. Nonetheless, we also note that Pennsylvania and Wisconsin were squeakers in 2004 election, indicating a significant Red presence in the population, and of course, Arnold implemented his right wing agenda soon after taking office with a pledge to get people to come back to California, and to make it less financially burdensome to live and work there.
In the end, states and nations worried about fertility rates (and many are) would do well to assess this connection. America is not a demographic outlier—our fertility rate is largely the result of the optimism, patriotism, and religious values of our citizens. And our fertility rates tend to be highest where these characteristics are most present. A little more of that in Italy, New York, France, Massachusetts, and Spain would go a lot farther than state-subsidized fertility initiatives.
RedShift
In light of this analysis and this analsyis, it strikes us as overly simple to deny any Red State/Blue State correlation in fertility rates.
RedShift
Brooks comments on the latter's analysis so it's hardly 2 separate analyses.
And Aleks is 100% correct. There no Red and Blue states in this context. Virtually all states run a near 50/50 split on Red V Blue with about a 15 percent swing topping the more extreme cases. IOW, even the most ardent Red or Blue states are only about 60-65% weighted.
You are also confusing income and wealth. It is entirely possible that fertility rates among middle classes increase during boom years. However the actual WEALTH of those middle class people doesn't vary much.
It is difficult to argue that the higher your socio-economic strata the lower the fertility rate.
Of course there are other factors that control fertility. The more densely populated an area the lower the fertility rate* as housing costs become more extreme. If you live on a farm your per child costs are not as severe as if you live in an apartment in Manhattan.
Your claim that welfare limits fertility fails an initial sniff test since most welfare programs entice people to have MORE children. And since most welfare programs generally only apply to the lower quintile, you would need to show evidence that fertility in that quintile is lower after welfare programs are implemented rather than showing overall fertility rates.
Correlation does not equate to causation.
* - As I noted in the 2nd paragraph welfare programs can affect fertility in densely populated areas by enticing the poor to have children.
"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw
that most blue and red states are really purple states: they are very closely balanced between Left and Right. Only at the county or congressional district level can yoy really find areas that are lopsided in one direction or the other. The apparent difference in fertility, which is less than it appears (as there are high fertility blue states and low fertility red states too) is probably due to non-political factors: for example, an older population in some blue states (definitely true in New England), and more immigrants in some red states (Texas and Florida for example), and, of course, the large number of Mormons (the one sect which definitely has a higher fertility rate than the general population; even Catholics really don't these days) in several Western red states.
Flyerhawk wrote,
Your claim that welfare limits fertility fails an initial sniff test since most welfare programs entice people to have MORE children. And since most welfare programs generally only apply to the lower quintile, you would need to show evidence that fertility in that quintile is lower after welfare programs are implemented rather than showing overall fertility rates.
But the analysis went far beyond a "sniff test." Even if a welfare state incentivizes fertility in the lowest quintile, the high taxes necessary to subsidize them must be drawn from the other four quintiles, and high payroll tax rates disincentivize fertility in those quintiles (as we have noted elsewhere). Thus, a higher fertility rate in the lowest quintile does not demonstrate higher fertility overall as New York City is now learning. A majority of the babies born there are state subsidized, yet the birth rate of the city is dropping.
Flyerhawk also opined,
The more densely populated an area the lower the fertility rate* as housing costs become more extreme.
That comment, along with this map, would only appear to reinforce our argument, not disprove it.
RedShift
Re; The more densely populated an area the lower the fertility rate* as housing costs become more extreme.
That comment, along with this map, would only appear to reinforce our argument, not disprove it.
How so? the equation of denser population = higher housing costs is what you would predict from market factors alone; it is independent of governmment policies and should apply no matter what the politics of the area.
But the analysis went far beyond a "sniff test." Even if a welfare state incentivizes fertility in the lowest quintile, the high taxes necessary to subsidize them must be drawn from the other four quintiles, and high payroll tax rates disincentivize fertility in those quintiles (as we have noted elsewhere). Thus, a higher fertility rate in the lowest quintile does not demonstrate higher fertility overall as New York City is now learning. A majority of the babies born there are state subsidized, yet the birth rate of the city is dropping.
And what is your evidence of this being true. Post-WWII America had their highest taxes, well, ever. Yet it was the largest growth in native children in America's history. How is that possible.
Show actual evidence tying effective tax rates to birth rates.
"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw
In response to flyerhawk's comment...;
Show actual evidence tying effective tax rates to birth rates.
...we provide a link to the study we've been citing.
The paper, written in 2005, is entitled, "Fertility and Social Security," and addresses the perceived effect of tax rates on fertility. The findings: a strong and direct correlation between tax rates and total fertility rates:
These findings are subject to the same cautions which always accompany regression studies, but they are highly suggestive that [social security taxes] may indeed have an effect on fertility decisions, that this effect is to reduce the number of children that people have, and that this effect is fairly large in size: an increase of the social security system on the order of 10% of GDP is associated with a reduction in TFR of between 0.7 and 1.6 children per woman. (p. 14)
We agree with the authors that more research is necessary, but the paper contains an impressive graph (Figure 3, pg. 11) that demonstrates that as social security taxes rise, the total fertility rate approaches 1.1 asymptotically, which is precisely where the fertility rates of Europe and Russia are headed:
Most notably, there are only four countries for which [the social security tax rate] is at least 6% and TFR is above 2 (children per woman). In contrast to this, in those countries where TFR is above 3, none has [a social security tax rate] above 4%.
The significance is debatable, and the authors suggest as much, but the correlation is a strong one. Nonetheless, we suggest that this supports the theory that the more socialist a country (or state) is, the lower its fertility rate tends to be.
RedShift
So we RedStaters are showing the way forward for mankind's future with our bold reproductivity.
I've never been so proud of my two contributions to the future.
BUT WAIT A MINUTE. As unreasonable fears go, I can't get excited about UNDERPOPULATION anytime soon.
In regards to the observation,
BUT WAIT A MINUTE. As unreasonable fears go, I can't get excited about UNDERPOPULATION anytime soon.
True enough, for Red State Americans. But Putin, and his counterparts in Europe, are less optimistic. They are
For example, Vladimir Putin [is] alarmed at Russia's declining population, and Europe's population will be halved within a generation unless the trend is reversed.
We Americans are not so worried, although Blue Staters ought to be:
In America, demographic trends suggest that the blue states ought to apply for honorary membership of the EU: In the 2004 election, John Kerry won the 16 with the lowest birthrates; George W. Bush took 25 of the 26 states with the highest. By 2050, there will be 100 million fewer Europeans, 100 million more Americans--and mostly red-state Americans.
We thank you for your contribution (but 2.1 kids would be more appreciated...)
RedShift
Comforting as the thought may be, BlueStaters won't stop procreating.
It is a nifty theory though. The loss of economic virility through restricting natural market forces might have the same effect as men wearing too-tight underwear.
Re: This would explain why Canada's and Australia's fertility rates are low, while America's remains at replacement levels
America remains at replacement for one reason: immigration. Our native-born fertility rate is below replacement.
Also, the red-state blue-state thing does not really work out for analyses like this, for the simple reason that there really are no red and blue states: there are, at best, red and blue counties (check out the by county voting pattern maps) or even just red and blue neighborhoods.