room at Fox News. He had just been on air, and I was about to go on to talk about my area of expertise, the latest immigration controversy. (Yes, this is a very DC story.) I asked him what he was working on and he said, “The fertility crisis.” I was broadly aware of concepts like the demographic transition, falling total fertility rates, and how even immigrants from high-fertility societies rapidly decrease their fertility after arrival. Well-worn books by Bryan Caplan, Jonathan List, and Julian Simon about how children and a higher population are great and why falling birth rates are bad have been with me for years, but this was the first I’d heard of a crisis.
Knowing that I worked on immigration policy, my acquaintance said that immigrants assimilate too rapidly to America’s low-fertility culture and we have to find a way to slow assimilation to boost the birthrate. I disagreed vehemently because I support cultural assimilation (which is going well, by the way), but also because he had misdiagnosed the mechanism. “They’re not assimilating to America’s low-fertility culture,” I said. “They’re assimilating to high opportunity cost in the United States, which is the reason why they’re here in the first place.” He asked what I’d do to increase fertility if that were the only outcome I cared about. After clarifying that I don’t support this policy, I said that I’d massively increase marginal tax rates on the second worker in any household to force them out of the labor market, which would lower their opportunity cost of having children. Then the producer came out and hustled me on set.
That conversation has stuck with me because people who worry about low fertility focus on vague cultural explanations and don’t look at the simple one staring them in the face: microeconomics. Opportunity cost is what you must give up to buy what you want in terms of other goods or services, but the concept applies to every action you take. If I go to the movie theater on a Friday at 7pm, I give up the opportunity to spend that time watching a Netflix movie at home. The cost of going to the movie theater is watching the Netflix movie at home, or any other activity that’s second on my list of desires. The more options I have, the potentially higher the opportunity cost I face.