Rising female labor force participation tends to bring falling birth rates. In the United States, this fertility decline was tempered by reduced child care costs made possible by the availability of low-skilled immigrant labor. According to one paper, lower child care costs reduced the tradeoff between work and raising children and increased the birth rates for college graduates in the United States.[10]
As many researchers note, isolating the impact of government policies on birth rates is challenging. One pair of scholars note, “The relationship between fertility and social policy is very difficult to analyze.”[11] Other researchers explain that family legislation is complex and disentangling cause from effect is a particularly murky undertaking in this area.[12]
It would seem that higher wages would increase the opportunity cost for women to have children. However, the impact of wages appears to differ for skilled versus unskilled labor. One study finds that higher minimum wages are associated with lower birth rates, especially among younger women.[13] Among college-educated women, however, those who have children appear to receive higher wages than childless women with similar backgrounds.[14] Expansions of the earned income tax credit also did not appear to impact fertility rates, despite increasing net take-home pay for certain women.[15] In sum, policies that mandate higher wages will likely have a mixed effect on fertility rates — potentially increasing them for certain groups while dampening them for others.
Paid family leave policies can be helpful to parents and other caretakers. Currently, the evidence on the impact of mandating that businesses provide paid family leave is limited and mixed. Researchers have not found large, systematic negative impacts on employers from mandated paid leave policies.[16] Researchers generally find that “firms are able to compensate for lost labor when their employees go on leave.”[17] But if “firms face constraints when replacing employees, it could negatively influence their performance.”[18] As discussed elsewhere in this article, however, unionization rules, occupational licensing and a general shortage of labor could constrain businesses’ ability to replace workers on parental leave.
Many studies of employers’ responses to mandated parental leave reveal that stricter labor laws and difficulty finding replacement workers make it harder for firms to cover the lost work of employees on leave, causing reduced profitability and survivability.[19] In labor markets with many available substitutes and no significant barriers to hiring, firms are better able to replace workers on leave. Whether the financial burden of the paid leave falls on the employer or, following the California model, is funded through state disability insurance withholdings, also influences the economic incidence of a paid leave policy.[20]
Family policies do not occur in isolation, and birth rates are influenced by many policy and nonpolicy factors. Reviewing global data, Australian researchers report one-time baby bonuses can just shift the timing rather than number of births. Weighing the evidence for a variety of different policies around the world, they find that “parental leave and in particular increased child care availability and affordability appeared most consistently linked to fertility gains in other countries [than Australia].”[21] Evaluating a broader range of evidence, one pair of researchers wrote that the evidence for pro-fertility policies is “weak, and the observed effects are small.”[22]
The evidence is even weak for some large-scale policies, such as providing health care coverage to low-income households. Examining the impact of Medicaid expansions in the 1980s, a team of researchers “conclude that there is no robust relationship between Medicaid expansions and fertility.”[23]
Researchers often note the need for broad-based changes in social norms. In a study of Japan’s wide-ranging policy efforts to increase birth rates, one scholar finds no significant response to policies supporting child care and parental leave and instead identifies norms about gender roles and work expectations as the key areas requiring change.[24] Studying France’s fertility policies, another researcher similarly identifies “very positive attitudes towards two- or three-child families in France,” and argues “a key aspect appears to be the favorable context created for reconciling work and family life by means of a fairly comprehensive, and continuous, support throughout the family life-course.”[25]
In an interesting new paper, a team of analysts suggest the previous fertility patterns no longer hold. They present evidence that in wealthy countries like the United States, women’s earnings and employment are no longer negatively related to fertility, and in some cases, are now positively correlated with it. They attribute this recent change to “four factors that facilitate combining a career with a family: family policy, cooperative fathers, favorable social norms, and flexible labor markets.”[26]
The research suggests there are significant limitations to the power of public policy to influence fertility rates. A variety of other social factors contribute to changes in these rates, and many of them are beyond the scope of government interventions. Because birth rates are currently the primary driver of population growth, this evidence implies that Michigan policymakers will be severely constrained in their ability to grow the state’s population by boosting fertility rates.