Real Clear Markets

Let's Have More Immigrants, Not More Babies

Fertility has fallen in all advanced countries and will almost surely continue to fall in the future. In the United States, the fertility rate is now 1.93 children per women, a little below the replacement level of 2.1. It waxes and wanes with the state of the economy and other factors, but the long-term trend is pretty clear: women have fewer children as their own opportunities, along with their ability to control their reproductive destinies, expand.

Bear in mind that right now roughly a quarter of all childbearing in the U.S. is unintended. As women's employment opportunities continue to grow, as marriage rates continue to decline, and as the promise of newer and more effective long-acting contraceptives is realized, women will almost surely have even fewer children than they do today with some ,opting out of childbearing altogether. As one indicator of where we may be headed consider the data on the number of women who have remained childless by the age of 40-44. It was 18 percent in 2008, up from 10 percent in 1976, an increase of 80 percent.

Should this be a concern?

Most definitely, says Jonathan Last, in his new book, What to Expect When No One's Expecting. In his words, we can "forget the debt ceiling. Forget the fiscal cliff, the sequestration cliff and the entitlement cliff. Those are all just symptoms. What America really faces is a demographic cliff: The root cause of most of our problems is our declining fertility rate." These problems, according to Last, include not just an aging population but less innovation, lower productivity, slower growth, and less ability to project our military power around the world. Just look at Japan, he says, where consumers bought more adult diapers than baby diapers last year!

But is Last right? It's certainly true that the aging of the population is a big fiscal problem in Japan, and to a lesser extent, in the U.S. Spending on pensions and health care are rising sharply as the number of working age adults per elderly person shrinks. But the solution does not need to be more babies. We can solve the problem by allowing more immigrants to enter the country -- legally. What we need is a new immigration system that not only creates a path to citizenship for the 11 million who are here illegally now, but creates a reformed system that increases the numbers allowed to come into the country in the future in a way that is better aligned with our economic interests.

The fact is that immigration, done the right way, is good economic policy. It may also be good social policy as well.

The key point from an economic perspective is that the 7 billion people in the world are a potential pool of talent that any advanced country should want to attract. Ignoring that pool is the equivalent of General Motors recruiting all of its workers from Michigan while ignoring the other 49 states.

Fears that immigrants replace or undermine the wages of American workers are, for the most part, unfounded. They may have hurt the job prospects of some of our least skilled workers, such as high school dropouts, but they have become the backbone of many sectors of the economy from construction to agriculture, thereby producing jobs for Americans in businesses that would otherwise be unable to flourish.

If we move to a more employment-based immigration system in which the needs of the economy are given much greater weight and family reunification a smaller role, immigration can become a dynamic force for growth and a partial solution to our fiscal problems. Countries, such as Canada and Australia, in which skills-based immigration is the norm, have benefitted from such a system.

Immigration is often feared because immigrants are "different," because they place a burden on local social services, and fail to assimilate by learning English and the other hallmarks of our culture. Yet, we have been a nation of immigrants from the beginning with each new wave raising such fears and later becoming almost fully accepted into society.

With a more rational and controlled immigration system, one based more on employer needs, any short-run problems of adjustment would be far easier to deal with and the resulting longer term diversity would be a potential source of strength for the nation as a whole. In the meantime, if fertility does decline, and there are fewer American children to support, whatever resources parents and governments have to invest in the education and health care of the next generation will go much further.

Expecting women to rededicate themselves to producing children is not in the cards, even with the kind of family-friendly policies that Last and some others support. One only has to look at what is going on in Europe where such policies have been tried at great expense to see that they are not likely to be very effective. At 1.6 children per woman, the fertility rate in these countries is well below U.S. levels.

So no, Mr. Last, we don't need more babies; we just need more immigrants.