Fewer kids means, eventually, fewer young workers to support an increasing population of retirees. This will result in less money being paid into the Social Security and Medicare systems, requiring either cuts in benefits, a higher retirement age or ever-ballooning deficits. Past experience suggests that Americans will be asked to work longer.
The U.S. bounced back from falling fertility once before, in the late 1980s. But as economist Lyman Stone has written, there are reasons why history may not repeat itself. High and increasing costs of housing, child care and education show no sign of reversing. The need for ever-higher levels of education in order to thrive in the U.S. job market is causing families to delay childbirth, which results in fewer children. Stone projects that U.S. fertility rates could fall as low as 1.5 or 1.4 — the levels that prevail in Japan and some European countries.
There is one more source of population growth that the U.S. has traditionally depended on — immigration. Low-skilled immigrants make it easier to raise kids by providing cheap child-care services. High-skilled immigrants earn more and pay a lot of taxes, while using few government services themselves, meaning that their fiscal contribution is enormously positive:
Locally, Madison’s taxpayer supported K-12 schools have long spent far more than most, despite tolerating long term, disastrous reading results.