It's unclear how many couples take into account the financial impact of having a child on their retirement plans. If they were to do so, the calculations would be rather discouraging. In fact, it could be economically beneficial for a couple to not have children while others continue to do so. — maytham naei

I have three children, all adults. I can tell you that the concerns you express had no part in our decision to have them, and they shouldn't, and they don't in most people. People have children because they want them. People want children because it's something people do. We're built for it. That doesn't mean you can't or shouldn't choose not to have them.

Birth rates have been falling. In some countries they are already far below the replacement rate - China, Japan, Korea, Italy. The US is holding steady right about at the replacement rate - 2.1 children per woman. It is my understanding that lowering birthrates are a result of increased industrialization incomes. Demographers predict that the human population will stabilize at the end of this century at about 11 billion.

You're right about that. The tsunami of liabilities and costs related to pensioners is going to increasingly define politics in developed countries for the next several decades. We can likely expect to see higher levels of automation, lower levels of investment, slower economic growth, less dynamism in general, falling levels of violent crime, among other shifts.

The university system in the US is headed for a crisis. Costs are already very high. Instructor compensation is already very low in many fields. The number of students will peak in 2025 and begin declining, rapidly in some regions. K-12 systems will face similar problems downsizing, and the expiration ESSER funds (absolutely gigantic amounts of funding given to low income school districts under the Pandemic stimulus bills) is giving a preview of what that looks like.

But the advent of AI and increasing automation, along with the ability to digitally offshore jobs to developing countries probably means that low skilled workers in developed countries continue to have high rates of unemployment and low wages.

Complicating matters, in the EU and US, younger workers will be increasingly of non-European descent, becoming a majority of working aged adults in the US and many European nations by the end of the century. They will be asked to do more than previous generations to support pensioners, while those pensions often vote against their interests driven by nativist sentiments.



"Stabilize" is a relative term. Globally, the population will stabilize. Regionally, demographics look set to cause massive issues. The population of China is set to drop extremely rapidly later in the century, which will cause all sorts of problems. Sub-Sahran Africa meanwhile will have explosive population growth such that UN projections have the region with more people than all of Asia by 2100. By these estimates, more than 1 in 2 people under age 18 will be African by 2100.

SSA's population will double before 2050 (another billion) and then double again by 2100 is midline models. This, combined with declining populations elsewhere offers a lot of opportunity. A region with chronic problems with underinvestment will become the largest source of market growth in the world and attract investment.

However, there are huge risks too. In general, the region's states are very weak, and conflicts have been much more common than most of the world as of late. The region will also be among the areas most heavily affected by climate change (although not the worst, and some areas are much less vulnerable).

Massive global inequality, the huge growth in the population, the fact that Africa is rapidly urbanizing and growing richer and Africans are thus much more able to be able to leave the region, sets the stage for migration issues that could easily dwarf those of 2015.

There are a lot of good ways for a declining populations in currently wealth nations to turn out, and for growth in Africa to help the region develop economically, but it also looks like a recipe for a global disaster TBH.

IDK, not much is said about it the growth side of the equation. Maybe it's because 2050-2100 is too far away for people to conceptualize, or maybe it's because the media is very good at ignoring SSA.

A well thought out post. Looks like you've paid a lot of attention to this issue. Thanks.

It will be interesting to watch the machinations of the state in all this. Their aging citizenry has invested large portions of their lives and income to the promise of a substandard living and care after they quit working. But the state has spent their investments, in some cases giving it to the other states, for other citizenry.

The best way to uphold their bargain would be for the state to decline in size and in proportion to their population, shifting resources from a disappearing segment (children) to the other (old people) if need be. Except we all know the state does not decline, does not want to recede in accordance with its population, and will instead import a new labor force to make-up for the problems it itself has caused, as Canada is doing right now. It will attempt to increase its population, tying for itself another Gordian knot.

I can tell you that the concerns you express had no part in our decision to have them — T Clark

You married and started a family in the post WWII era of wide-spread prosperity and very good long-range economic prospects. A lot of people in China and other large demographics are not having more than 1 or 2 children because the cost of housing, medical care, and retirement is too high to make a commitment to 2, 3, or 4 children.

Also, at this point in time, upwardly mobile women understand that having a large family means interrupting or halting their careers, and upwardly mobile families want their children to be upwardly mobile too -- which amounts to a fairly expensive project. A family now needs two fairly well professionally employed parents to pull it off without too much economic sturm and drang.

Obviously, billions of people did not and are not figuring retirement into family size. My parents had 7 children during the depression and WWII; I was the last in '46. I don't think they had time to calculate their future prospects. As it happened, and once the last of us left home, their retirement was peaceful and pleasant, thanks to a generous postal retirement program and Medicare.

You married and started a family in the post WWII era of wide-spread prosperity and very good long-range economic prospects. A lot of people in China are not having more than 1 child because the cost of housing, medical care, and retirement is too high to make a commitment to 2, 3, or 4 children.

AT this point in time, upwardly mobile women understand that having a large family means interrupting or halting their careers, and upwardly mobile families want their children to be upwardly mobile too -- which amounts to a fairly expensive project. — BC

Whether or not people can afford to have children is not the question on the table as described in the OP. It is talking about the effect of fewer children on the retirement system. As for financial issues with child rearing, we did take those into account. My wife and I didn't have children until we were financially secure enough to raise them.

The best way to uphold their bargain would be for the state to decline in size and in proportion to their population, shifting resources from a disappearing segment (children) to the other (old people) if need be

Unfortunately, this doesn't work financially. Total costs per K-12 student are $8,200 per year, just $1,200 from the Feds. CHIP, the program for children's healthcare, accounts for just $18 billion; Medicare, for seniors, is $1.2 trillion (both demographics also use Medicaid). Just Social Security and Medicare cost about $38,000 per senior living in the US. This is why these programs are causing the deficit to surge. Throwing all the money used to children today at the problem wouldn't plug the gap.

Medicare also doesn't cover key services more and more older adults need. Long term residential care isn't covered for example. A person's assets need to be liquidated to qualify for Medicaid, which will cover nursing homes, but not other forms of assisted living.

Thus, who ends up inheriting middle class estates from their parents can be determined by how the parents die. Heart problems that cost $800,000 in care? You can pass on the estate, Medicare will pay the cost. Alzheimer's that requires $800,000 of residential care? The estate goes to the government (but notably, retirement savings accounts that the wealthy tend to have more of their net worth in are exempt, while real estate, where the middle class has most of its net worth, is not). Reforming this would be very expensive though.

Seniors are by far and away the most expensive demographic to extend health insurance too, which partly drives the problem. The state will shrink; it will have to due to the financial pressures of meeting entitlements, but taxation will also have to go up significantly. Hence, slower growth and less real disposable income (life expectancy is also falling).

But the state has spent their investments, in some cases giving it to the other states, for other citizenry.

In the US at least, this is not quite the case. Neither the Medicare nor Social Security Trusts are empty yet. The big issue facing those programs is that not enough taxes were collected while the Baby Boomers were working. The cap on payroll taxes should have been lifted or removed decades ago.

Right now, the current system is not only regressive (high earners pay a lower %), but increasingly cuts off a larger and larger share of all income from taxation as more of it is earned by the highest earners. In essence, skyrocketing inequality has contributed to the entitlement crisis by allowing more and more income to escape taxation due to an arbitrary cap (a greater share of income coming from capital gains has a similar effect).

This is in part because Baby Boomers, in the aggregate, voted for politicians who promised to stop such tax increases, and further, who slashed their other taxes, resulting in them reaching retirement age as the US achieved an all-time high debt to GDP ratio, with debt eclipsing $31 trillion.

Here is how the situation stood in 2008 vis-a-vis extending W. Bush's tax cuts.


The largest legislative achievement of Donald Trump, who lost voters under age 55 by 9 and then 11 points in his two elections, was to further slash revenue, resulting in US borrowing tripling during his term even before the pandemic.

It is unfair to ascribe a given set of positions to a large demographic cohort. However, in the aggregate it has been the people soon to be directly affected by the crises who voted for the conditions that created it, i.e., slashing taxes during their peak earning years while not reducing their entitlement benefits.

Broadly speaking, that generation has held the White House since 1993, when they were in their late 20s to mid 40s. They will have held it for at least 32 years, but 36 seems more likely. They became a majority in Congress in 1998, when the midpoint for the generation was 42 years old. By contrast, Congress had just five Millennials through 2019, at which time the oldest in that cohort reached 38 years of age. This was 0.2% representation for 29% of the adult population. Today, the House has 31 Millennial or Gen Z members, the Senate just 1. Congress still has more members 78-90 than 18-45.

Party leadership is even more lopsided. Think of Sanders, head of the progressive wing, McConnel, Pelosi, Feinstein (although her influence has waned), Clinton, Trump, Biden. The average age of the last two cabinets has been close to retirement age. A similar phenomena can be seen throughout the West to varying degrees.

I don't think gerontocracy explains the entitlement crisis, but I think it is definitely an overlooked element in it. I also think the life experiences of leaders' generations play a roll. The Baby Boomers experienced the best period of economic growth in US history outside of their parents, while also avoiding World War II and the Depression. Millennials came of age during the worst period of economic growth in US history. A preference for the present, and faith that things will work themselves out might be colored by these different experiences.



Realistically, the problem will require a two pronged solution. Significant tax increases, especially on the wealthy and on the estates of retirees after they pass away, and also cuts to benefits or restructuring to reduce costs (e.g. nationalizing healthcare, or forcing the AMA to allow more medical schools to open and cease their horrific rent seeking behavior).

And of course, inequality also tracks with age at the macro level.

Millennials still hold far less wealth than previous generations did at similar ages. When boomers were around the same age as millennials today, they held roughly 22% of the nation's wealth compared to Millennials' 7%, Fed data shows.

This will get compounded as less wealthy younger people have to dedicate resources to support their parents while others inherit this huge share of wealth.

CTvI: You have an excellent grasp of thes issues.

I assumed that the predictions of major world population growth would come to pass -- 14 - 16 billion? Recently I began reading discussions of how individual decisions across very large populations were going to lead to a shrinking population in places like China. It's already happened in Japan, much of Europe, and in some demographic segments of the North American population. Good news in many ways, but highly problematic at the same time. A shrinking population means that China (at some not too distant point) will not be the workshop of the world. That's good for the countries that will take up the slack, bad for China which will see their output shrink with far fewer prime-age workers.

I wonder how global warming will moot labor supply / population issues. I've read some long term economic fore-guesses that don't seem to be taking a much hotter world into account. If critical food growing areas become too hot to cultivate in the required way, that too will speed up population decline.

less wealthy younger people have to dedicate resources to support their parents while others inherit this huge share of wealth — Count Timothy von Icarus

The intergenerational wealth transfer will impoverish many to a greater extent than they already are, and enrich a fortunate minority more than they already have been. The distribution of wealth and poverty will get increasingly disproportionate.

I have benefitted a little from intergeneration wealth transfers -- small potatoes, but it helped. I anticipate my (hopefully) natural and speedy death within the next 10 years, and if all goes well, somebody will benefit by the inheritance of my small bin of potatoes. (It won't make anyone event remotely independently wealthy.) Or sadly, it might end up enriching a longterm care facility.

When one comes into this world one is pure essence with no identity, gaining identity through successes and failures in its reactions to its context/environment. This creates an identity that is a healthy one or a defeated one and one's essence either enjoys or suffers under the state of its relationship with its environment/context. Damaged individuals, and defeated individuals tend to be poor models for their offspring, simply on the basis that one can only provide for your child what you have gained for yourself. In the case of the defeated this means a poverty situation for the offspring of these particular individuals. Providing as they would, an impoverished environment/context for their children.

Providing as they would, an impoverished environment/context for their children. — boagie

I'm surprised that you don't draw the obvious conclusion that it is in the interest of any society to support parents and ensure that a good social and physical environment is made available for families - not out of charity or even justice, but out of self-interest. There's an old saying that it takes a village to raise a child. Too many parents and children don't have a village - a city is not the same thing.

I couldn't agree more, one's first environment after the womb is the family, and often this is not an ideal nurturing context. Realizing that there is seldom an even playing field for the parent or the newborn, some process should be in place to at least protect the newborn. Protection, which in all probability was not available to its parents. Yes, society should be responsible for all new born innocence brought into this world.

I'm sorry to be picky. I do, of course, agree that the new-born should be protected. But what's the point of protecting them for the first year or two and then abandoning them to their fate. To be sure, as they grow up, one can expect them to be more independent and they will demand that. But appropriate support should be provided until they are.

Which suggests to me that in some cases, some support may be needed for a long time or even for life. But enabling people to function as independently as possible is probably cheaper, as well as more humane, than clearing up the disasters that result from not supporting them.

You do say "at least". You are right to do so. I'm just reinforcing that.

In the past I watched a lot of programs about crime and criminals, the bad guys with no moral fiber. One day after a good deal of consumption of such material, I was stunned to realize most of them were victims either of the former context/s or some mental biological handicap. Some committed horrendous crimes against others, and I realized that they had lost their humanity over a long period of time because their environment/context didn't really treat them in a humane way. Some I realized preferred jail to the constant struggle on the outside, which they never were prepared for. The bulk of criminality is due to people not being equipped to function properly and productively in society. So, society cannot really complain about too much with integrity, for whether it is seen as a doable thing to ensure an even playing field, it is apparent that this is the source of most criminality. Society just hasn't evolved so that it can properly serve the child and adolescent to ensure an adapted adult.