The economics of fertility: a new era (2023) [pdf] | Hacker News Reader

The economics of fertility: a new era (2023) [pdf]

faculty.wcas.northwestern.edu

58 pointsmooreds57 comments

Good and safe fully fenced playgrounds away from cars are important - both open-air and closed for the rainy/snowy days. So a bunch of families can leave there children and even a single parent can look after them for an hour or two. Children like playing with each other, just make it available, so the parents can read a newspaper/work on their Macbook without being scared to look away from their child for a minute.

Same thing with kids rooms in cafes/restaurants/public places - they should be mandated by state for big establishments

Fully agree. In some parts of Asia, there are so many kid friendly cafés and restaurants that it is easy for families to boycott the ones that aren't. That, in turn, creates a financial incentive for places to become kid friendly.

It feels like Sydney, Australia is going the opposite direction & removing fencing to force parents to pay attention. At least that's a change I've noticed with any new playgrounds or refurbished ones.

In reading the comments, no one mentioned grandparents, which is kinda sad. In most non-Western places, it takes a village to raise to child. Something is clearly amiss here in our highly individualistic Western world, and of course, the answer would be, if I only had more money.

There is, in my opinion, an inverse correlation between the housing market and fertility.

Young couples can't have kids when they are still living with their parents way past their twenties.

Same story when they can barely afford a place for themselves.

On the other hand, when the housing market crashes durably because of demographic reasons, fertility rebounds.

Can this actually be observed from data though?

Demographic dips are not very frequent in modern history, and on longer timescales we rarely have normalized housing affordability data.

But we have those for Paris since 1200.

The great plague -> population reduction of about 30% in the area, housing market quickly divided by four.

Then the first and second world wars, the demographic dip was not as harsh, but many young men lost their lives during the first war, and the morale was not good, also the 30s economic crisis, overall the housing market was divided by 15. Unprecedented for the whole Paris housing market recorded history.

It was followed by the well known baby boom. Housing was historically dirt cheap. It took about 50 years to reach the levels seen before the wars.

The relationship between housing market and fertility has also been studied in some countries, such as Italy.

And you can see a very flat housing market in Tokyo and dirt cheap houses on the countryside of Japan, simply because there is no one to occupy them.

(2022)

Or is this something different: https://www.crctr224.de/en/research-output/discussion-papers...

Looks like the same authors to me, maybe a different format?

TL;DR: people in higher income societies have more children if they have good access to childcare and education?

I recently received an invite to work in Cambridge, England, for a year. (This is a simplification of a more complex situation, but I'll leave it at that.)

I have two very young kids.

It looks like I'll have to decline the invitation, as it turns out that nursery childcare in Cambride costs well over $1000 per child per month. (e.g., https://www.montessoricambridge.co.uk/admissions/fees-and-se... --- and these guys, at ~$1600/month/child, are far from the most expensive.)

In the developed world, in an upper middle class home, having children has become something akin to an extravagance: Very expensive, and quite uncommon. I'm the only one in my peer group with children, and I have two siblings and six cousins who are all childless in their thirties.

I was thinking of going back to get my PhD after a few years of working, right when I had a 2 year old and a newborn. I applied and was offered the best fellowship they had, but then I found out that the university’s health insurance plan for me didn’t cover my children, and the cost of covering the kids alone exceeded their generous fellowship. Negative money left for childcare, rent and food. Sadly it wasn’t even remotely possible. I even happened to know the dean of the graduate school through a childhood friend, and told him this story, and he shook his head and said “I know; it’s a problem. I’m sorry!”

Most children aged 3+ are entitled to a few days of free childcare/nursery in the UK, but it's unlikely that a montessori school accepts the government scheme. They may do though, if you email them. Childcare for the remaining two days is at least more affordable, and if your job offer was from the university they also offer free childcare, as do many employers (again worth asking if it wasn't mentioned in the job offer).

Thanks for the tips.

Unfortunately, my visa would have a "no recourse to public funds" note -- so I wouldn't be able to avail myself of any reimbursement scheme.

Besides, "3+" is also a problem, as one of mine is much younger than that. (The difficulty of raising children is naturally front-loaded; it starts out very hard, and gets easier and easier as they grow. What's interesting is that the UK assistance plan only kicks in as things get much easier. The difference between a two year old and a three year old is vast.)

The University's childcare scheme is certainly not free -- it's a whopping $1840/child/month. https://www.childcare.admin.cam.ac.uk/nursery-fees

If you're an employee, they take it out of your salary. It's not even discounted. But they charge for it "before income tax, and that's where your savings come in." I'm not joking.

Imagine spending $3700/month just on daycare.

Daycare costs are exactly what stopped my wife and I from moving to UK, and instead had me accept a significant salary cut in order to negotiate fully remote work.

Parallel reply asks where do you live now with cheap childcare, giving number like $1600/kid. Here in Kraków, Poland, it's more like 1400 PLN (~$325), and most private facilities are enrolled in a program that makes the city cover half of that. At kindergarten level, there's enough good, public facilities available, that you only have to pay if you want some usual/experimental facility.

Of course, there's a cost-of-living difference between Poland and UK/US, but it's not that big - relatively speaking, daycare here seems 2-4x cheaper anyway. It's one of increasingly many things that make me think Poland is the goldilocks zone of Europe - all the benefits of first-world development, with little to no drawbacks.

Yeah, I'm in Prague. Here it's ~$700/child -- but I'm sending the kids to a special English-language daycare, which is more expensive than most others. The quality of care here is just as good, or better, than what I've seen elsewhere at much higher prices.

I spend quite a lot of time in Croatia, and it's just as inexpensive over there.

Central Europe is indeed a good place to be right now.

Where do you live now with cheap childcare? We live in a DC suburb, and daycare was at least $1600/kid (we have 3, though only 2 at a time in daycare), and when they were infants it’s $2k.

I have declined offers to interview with very-close-to dream companies because they wish for on site employees, and my kids cannot be uprooted at this time.

Which would be fine if I could tune for intrinsic reward vs extrinsic in my current situation. Part time, startups, taking a chance at consulting, etc.

No dice with this child care cost.

This is a normal rate in the Netherlands too.

Where is it cheaper? In the USA, 1k/child is on the low end I think.

That’s what I’m paying for my niece in…Spokane. Actually it’s more like $1.2k now. Hardly known as a rich city.

As luck would have it, I was able to move to where childcare is essentially free. We are certainly compromising in other areas, but for now, it has been a net positive.

>In the developed world

You mean the western world. The UAE has one of the highest GDPs per capita globally and yet for $1000/month you could hire a full-time live-in nanny. The difference is western countries generally have much stricter restrictions on immigration from poorer countries, and high minimum wages.

No, just cos you can exploit some poor Sri Lankan woman in the Middle East doesn’t make that a solution everywhere.

Leaving their own children to raise someone else’s while being treated like a middle ages servant is absolutely not what we should be encouraging.

I work with a non profit that helps those women escape those places once their passport is stolen.

Not all ‘masters and ma’ams’ are abusive but a large percentage are.

That reminds me of living in Hong Kong in the '90s, I think the number one job title of the entire workforce went to "Amahs"--live-in maids/housekeepers--generally women from the Philippines and remitting money back home, often to children they seldom see.

Not nearly as terrible as what I hear about places like Dubai today, but the workers in HK still preferred to be employed by visiting westerners since it meant better treatment.

Any country where you can easily utilize undeveloped/developing world labor is going to have cheaper labor costs for unskilled or semi-skilled work. So Singapore, Hong Kong get this advantage also.

I mean, ya $1-1.6k/month is expensive. But that seems normal for Seattle, maybe even a little cheap. It’s basically that price already in every American HCOL city.

I would say that's not the key takeaway; it's about the relationship between income and children within a country.

From the conclusion:

"Past fertility research largely focused on understanding fertility decline over time and the negative cross-country relationship between income and fertility. The most important mechanism in explaining these patterns was the quantity-quality tradeoff. However, much has changed over the last few decades. In particular, fertility is no longer negatively related to income across high-income countries. Instead, family policy, cooperative fathers, favorable social norms, and flexible labor markets have become key determinants of fertility choice. Thus, a new era of fertility research has begun."

Yes. Off topic, but take a look across countries for example Austria and Switzerland. Similar geography, language, culture, ethnicities and religions, very similar total fertility rates, but in Austria childcare is cheap (~3% of average wage) and in Switzerland, expensive (~60% or more).

Conclusion: childcare cost is not causative.

1. Austria and Switzerland both have TFR of 1.5 according to https://en.wikipedia.org/wiki/List_of_countries_by_total_fer...

2. "Switzerland has one of the most expensive childcare systems in the developed world and also gets bad marks on parental leave, according to a report by the United Nations Children’s Fund (UNICEF)." https://www.swissinfo.ch/eng/society/switzerland-among-worst...

This is very counter to reality . In high income societies ppl who have kids are often the ones the without good access to childcare and education. People have less kids as you move up the income spectrum.

Prerequisite to having kids is removing choice and meaning in life.

"Good access to education" means more time spent in formal schooling, and later marriage. This alone accounts for most of the decrease in fertility; even if the probability of having children per year between two groups is constant, if one group marries at 25 on average and the other at 35, the first group will be 3x more likely to have children (since it has 15 years until 40, the rough end of fertility, while the other has just 5 years until 40).

// Prerequisite to having kids is removing choice and meaning in life.

Unless I am grossly misunderstanding you, this is exactly backwards. Having kids was the most important choice and the most meaningful one I've ever made.

The fact that being highly educated and well-off has made this a somewhat less "obvious" choice is the sad part.

Why does Isreal have such a high birthrate?

Orthodox Jews, who do not share the same education system:

https://www.timesofisrael.com/in-israel-former-ultra-orthodo...

And Muslims?

removing choice. having kids is not something ppl actively choose in most cultures. Its just a part of life.

Advanced demagogy.

A childcare worker has a cap on the number of kids they can competently handle at a single time, both legally and due to very human limits. It's interesting that we haven't seen that much embrace of new technologies that might raise this limit, increasing the aggregate supply of childcare and hence lowering prices across society, when childcare is so expensive in so many places.

How exactly would you use technology to raise that limit?

From my experience, direct 1:1 attention is the single most important thing for children. I would (and am) actively paying for childcare not to use technology to increase that attention.

One way to look at it is that socializing the children requires a particular amount of raw time from the humans being their interactive role-models. This means prices will tend to rise alongside the wages of those parental figures.

I say "socializing" because I want to distinguish it from either imparting academic knowledge or providing for material needs/safety. I think those three categories are very different in terms of how easily--or wisely--they might be handled by automation.

For example, a robot that changes diapers and stops your child from falling over cliffs: Awesome. An endlessly patient software tutor for teaching algebra: Cool. An AI that serves as virtual aunt/uncle/best-friend? Uh oh.

Replacing teachers with software doesn't sound like a recipe for success to me.

Simply adding distractions like tablets and laptops is already doing plenty of damage.

I agree, but that's because (good) teaching is also being a interactive model for those hungry little brains, and are needed when something occurs outside the specialization of the software.

The "distractions" are harmful because suddenly kids are getting their world views and expectations from too-ficticious characters or "influencers" with perverse incentives.

If I knew that, I'd be making a lot of money by now.

It's good that you have the option and disposable income to pay a premium for a private nanny or however else you're maximizing that direct 1:1 attention, instead of an ordinary daycare. For the rest of us, we mostly need someone to watch the kids while we're at work, and paying that much would probably make it cheaper overall to just watch them ourselves.

I've been puzzled at the economics of it. If it is cheaper for us to watch just 1 kid, where the heck is the money going in the daycare with N kids? Rent?

Odd Lots did a very interesting podcast on the subject recently: https://podcasts.apple.com/us/podcast/the-economics-of-build...

Transcript: https://www.bloomberg.com/news/articles/2023-11-06/transcrip...

What do you mean when you say it’s cheaper for you to watch 1 kid? What’s the comparison?

Comparison is to the wages the caretaker is giving up in order to be at home with the child. Of course there is a spectrum but it is a high bar.

I don’t think very many people are paying more for daycare than they make while their kids are in it.

Of course, those that make more don't, those that make less are likely to just DIY. And with those who make more, the ratio is still not even close to N, which makes the overhead interesting.

What ratio?

This is a huge problem. Childcare is one field where productivity is decreasing due to regulations that keep pushing down child-teacher ratios. They are basically told that they can only grow more expensive (since productivity can’t increase while labor keeps becoming more valuable) as time goes on. Pretty soon only the rich will be able to afford it (and that’s already true in many regions).

Random brainstorm from a childless man: cameras, cameras everywhere, and some sort of AR tool for the carer, so the kids get tamagochi-esque meters. Beep, camera 4 spotted kid 7 needing interaction. Beep kid 5 is acting cranky, last drink 26 minutes ago, while you're at it refill kid 13's water bottle.

Yeah, very dystopian... Bonus if the AR overlay allows eye contact, we don't want the kids staring into the soulless face of an Apple Vision Pro ;)

The primary way technology can help reduce the cost of childcare is by providing a good billing solution for rock bottom cost, not by replacing teachers.

It’s impossible. 80% of their costs is already for teachers, 10% for insurance and 10% for rent. There is literally no way to push costs down, especially since labor costs will continue to increase. If productivity can’t be increased at all, the whole industry is basically doomed by math.

I'd encourage you to listen to this podcast or read the transcript.

https://news.ycombinator.com/item?id=39246681

> It's interesting that we haven't seen that much embrace of new technologies that might raise this limit, increasing the aggregate supply of childcare and hence lowering prices across society

Controlled access pens with an iPad in them? /s

Reply on news.ycombinator.com