Document Type

Research Paper






"From 1958 to 2021, fertility rates in the United States have declined from 3.5 births per woman to 1.8 births per woman (macrotrends). Declining fertility is a common trend in developed countries, specifically for countries in the Organization for Economic Cooperation and Development (OECD). Fertility is crucial to workforce replacement, so declining fertility rates have a direct impact on GDP. In the United States, the working-age population growth rate has fallen below the total population growth rate. Workforce replacement is the ratio of working-age people entering the workforce to retired age people exiting the workforce. Thispaper studies the relationship between the rising costs of children and fertility rates. Economists have agreed that individual demand for children responds no differently to an increase in costs than any other market commodity; as price increases, demand decreases. Children also fit the definition of a normal good as established by Thomas Malthus’ theory of fertility. Higher female educational attainment and employment rates in the developed world have resulted in an increased opportunity cost of having children for women. Higher opportunity costs for women combined with high monetary costs of private childcare causes an economic constriction on the demand for children. The literature demonstrates that government intervention can correct the market failure of private childcare in the United States to alleviate the costs of children..."