Are babies bad for the economy?
by Pat Fagan
August 6, 2008
A report from Austrailia’s Productivity Commission claims that an increase in the nation’s birth rate will hurt the economy.
However, if one looks at the Australian Government’s own charts it is clear that Australia is heading into a big demographic problem with way too few children to support an aging population.
The Commission’s suggestion is very shortsighted and parochial: loss of taxes for the government.
The reality view: The longer the fertility increase is delayed the greater the crisis eventually faced. Babies that are not born in a particular year cannot be made up in future years. Australia may later decide to import other countries’ people (but these people will likely be poorer and less well-educated than the children that could be born in Australia).
Furthermore, while the government may lose some taxes short term the average Australian household will likely not be much affected, except those where the mother brings in a very large salary (say over $110,000 per year). U.S. research shows that for married mothers with children who go out to work the income is virtually a wash when all the extra expenses and taxes are factored in (Aguirre M.S. 2006). And this without adding another loss: the loss of household productivity through which the wife adds value to her husbands income (it really is their income, but you get the point) by her own labor value added.
This is a case of an alliance between socialist and capitalist interests. Feed the market for the time being, bring in the taxes and forget the long term common good and definitely forget what women might want.
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Comments
Without raising the birth rate, there will be economic problems as a higher percentage of the population than ever before becomes retired or unable to work.
Having more babies sounds like an easy fix – and it would be, for a time. But it’s not sustainable! Have babies now, and there will be people to care for the currently middle-aged when they retire – but those babies will one day retire too. Maintining constant population growth forever isn’t possible, the earth can only produce so much food even if every acre of usable farmland is used intensively. Sooner or later, growth *has* to stop. Increasing the birth rate would only buy time, putting off the problem for now so that in a couple of centuries it rears it’s head once more even bigger than before.
By: angela shanahan | August 7, 2008 at 3:21 am
This is not an accurate representation of the productivity commission report. I have actually read the report and it doesn’t say this at all. It does refer to a fertility boomat two different ends of the class education spectrum ad points out teheconomic problems. For example, the tax ‘churning’ which we se in australia ,ie the attempt to give back something to tax payers because of their children, can be counter productiv for the middle classes. People can end up either slightly worse off or not much better off than if they paid no tax.
Then at te other end of the spectrum in Australia as in many other western countries, we have had a huge rise in the number of ex nuptial births to twenty something women with poor education since the 90’sNow many of these women are family oriented and once would have married . Courtesy of the sexual revolution they no longer expect the father of their children to marry them – so they go it alone.( Many do eventually marry- if not him then someone else) Aside from the bad- and costly- social effects, the welfare system will be stretched supporting them- meanwhile support for middle income families with higher education xpecttions etc.will dwindl under a Lobor government. All wihe support of the neo ecologists .The last government was quite even handed and supported middle class families as well, which is wise policy, bcause as the current rise in fertility shows that policy let the brakes of many thirty something women who wanted to have children all along , but delayed it.