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Right Now | Less Work for Nanny

Fertility and Destiny

March-April 2005

Current low birthrates among highly educated women pose a challenge to the U.S. economy and may compound existing social problems, says David Ellwood, Black professor of political economy and dean of the Kennedy School of Government. As a result, the United States faces an imminent shortage of well-educated workers aged 25 to 54. That may mean lower productivity growth, less competitive U.S. companies, and even greater inequality between America's rich and poor. Speaking at a Kennedy School domestic-policy forum last summer, Ellwood said that the personal choices we make about family life -- namely, when to marry and when or whether to have children -- are reshaping the contours of American society. "Demography," he declared, "is destiny."

Chart by Stephen Anderson

Faced with the prospect of juggling a career and parenting children, high-skill women are delaying motherhood or skipping it altogether. In fact, among 40-year-old college-educated women, 27 percent have not yet had a child -- and many of them never will. Furthermore, those 40-year-olds who have given birth are averaging 1.6 children apiece, far below the 2.1 children needed for "replacement," the rate that would keep the population constant, Ellwood says. Contrast this with women who never finish high school, who produce an average of 2.6 children. Though that number has declined in recent years, "it's still well above replacement," he notes.

Well-educated women find plenty of incentive to put off parenting as long as possible, avoiding what Ellwood calls the "motherhood penalty." In recent research with Lily Batchelder, M.P.P. '99, and Ty Wilde, a graduate student at Princeton, Ellwood studied fertility patterns and work skills, using data from the National Longitudinal Survey of Youth. This study, begun in 1979 when the subjects were 14 to 21 years old, has gathered data on them at regular intervals. By tracking women's wages over time, the researchers found that college-educated women see their wages level off sharply after childbirth, causing them to lose 15 to 20 percent in income during the subsequent 10 years. Their paper, thus far unpublished, indicates that "in some of our models [the percentage is] even higher," Ellwood says.

No matter when a high-skill woman has a child, her wages appear to stop their upward trajectory at that point. "Women who had babies earlier saw their wages flatten earlier, and women who had their babies later saw their wages flatten out later," Ellwood says. The researchers checked out the converse hypothesis: did women who found themselves on a wage plateau decide to leave the workforce to have children? "In fact, the paper concludes pretty decisively that that's not what's driving things," he says.

When Ellwood describes his findings to women, few are surprised. "I think they feel some real sense of frustration and resentment that so much of the burden of raising children ends up falling on women in terms of career costs and other things," Ellwood says. That burden feels especially disproportionate in that the birth of a first child appears to have little if any effect on fathers' wages.

The story is different for low-skill women, who are less likely to suffer wage declines after they give birth because they aren't making much money to begin with. For them, there are fewer benefits to delaying motherhood.

Babies born to low-skill women often grow up in single-parent families as some of the poorest, most disadvantaged children in the nation's history, Ellwood says. In contrast, college-educated women tend to marry before they have children, and their kids, born in financially comfortable two-parent families, are "among the most advantaged children that the nation has ever seen."

Rich and poor, Ellwood notes, these children are the workforce of our future -- and he believes this demographic gap will likely have severe economic consequences. With so few children being born into homes that offer the advantages of education and steady income, where will tomorrow's high-skill workers come from? "If this economy is going to grow in terms of workers, if productivity is to increase," he says, "we'll have to look to older workers and immigrants."

It is essential, he stresses, for policymakers to consider solutions now. "If we don't take seriously a much more thoughtful immigration policy, if we don't ask what we can do to make work pay for low-skill people -- so that they, too, might have a chance to postpone childbearing and form families -- if we don't think about what it's going to take to make the family tradeoff less costly for high-skill women," Ellwood says, then "the consequences will affect everything, perhaps even our sense of unity and community."