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Here’s what lower U.S. birth rates could mean for Social Security


Covid-19 was a pandemic in which women gave birth to less children.

It is possible that these low U.S. Birth Rates will continue for a long time, which could impact the economy and Social Security benefits.

Since years, the total fertility rate is on the decline. The average number of children that women had to bear in 1964 was 3.2. According to The, this number had fallen to 1.8 by 1974. Center for Retirement Research at Boston College

Fast forward to 2019, and the provisional total fertility rate was only 1.7 according to a March 2020 study by the Centers for Disease Control and Prevention. Covid-19 also led to fewer births in 2020 than was expected. New research by Cornell UniversityIt was found that during the pandemic, the U.S.’s birth rate fell by 7.1%

The Center for Retirement Research suggests that pregnancies delayed between 2020 and 2022 can be postponed to 2024 or 2026.

However, there are good reasons to believe the birth rate will remain low.

Anqi Ching, Assistant Director of Savings Research at the Center for Retirement Research, says that the average age of motherhood in America and elsewhere has been rising over the past two decades.

In the United States, women are now around 30 years of age. However, the total fertility rate for women in the U.S. was 1.7 per year as of 2019. This is well below the replacement rate which was 2.1.

Factors affecting birth rates

Although women might expect to have at least two children, some reasons may prevent this from happening.

If women are in their 30s and delay getting married during Covid-19 they could face fertility problems that prevent them from having the children they desire.

Chen explained that “the more you delay the better your chances of meeting your expectations.”

Chen also suggests that women in their 20s who experienced the recession may have fewer children over their lives. Because of the potential for long-lasting career and earnings opportunities, starting your career in these circumstances could be a good idea.

Experts closely monitor the birth rate because of its impact on retirement and Social Security.

Chen stated that this program is pay-as you-go. Workers today pay for the benefits of retirement. The benefits will be paid by future workers when the current workers die.

The Social Security Administration closely monitors birth rates. The government agency raised the assumption of total fertility from 1.95 to 2. This is a 0.09% increase over the 2020 report.

This projection and an expected slower pace of mortality improvement were both positive in the most recent estimates.

The Center for Retirement Research stated that the overall program faces a possible shortfall. This should be enough to prompt legislators to take action to prevent “precipitous reductions” in benefits, which would begin in 2034. Only 78% will be paid if nothing is done before that date.

Retirement: How do fewer children affect you?

There could be an upside to retirement for those women with less children.

A mother’s income is permanently reduced when they have children. This “motherhood penalty” affects many women.

Due to Social Security’s lower income, this can be carried over into retirement.

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The motherhood penalty could be reduced if women have fewer children, as their earnings wouldn’t suffer as badly.

Social Security, however, is a pay as you go system. Therefore, less births could mean that there are fewer workers who can contribute to the system. Chen explained that it could mean an “everyone penalty” and lower benefits to everyone.

Chen stated that if there are less workers in the future then this could have an impact on the money going into Social Security, which would also affect benefits.