Remote Work's Mini Baby Boom Ended: U.S. Fertility Rate Hits Record Low in 2023
The United States is experiencing significant demographic changes as women are starting families later and having fewer children, with some forgoing having kids entirely. According to a new report from the National Center for Health Statistics, the U.S. total fertility rate hit a record low of 1.62 births per woman in 2023, well below the replacement rate of 2.1 births. This decline is occurring in the context of a slowing economy, rising economic uncertainty, and shifting labor market trends, including a decline in remote work and employee benefits.
Key Findings
The total number of births in 2023 was 3.59 million, a 2% drop from 2022 and the lowest number since 1979.
The drop below replacement fertility rate began in the U.S. around 1971 and has been consistently below for the last 15 years.
The highest birth rate was among women ages 30 to 34, while women 40 and older saw a modest increase in their birth rate.
Teen birthrate hit a record low of 13.2 per 1,000 females, a 68% drop since 2007 and 79% since the peak in 1991.
The general fertility rate decreased by 3% to 54.4 births per 1,000 women ages 15 to 44, with declines across most racial and ethnic groups.
Nearly one-third of all babies were born by cesarean delivery in 2023, at 32.4%, the highest rate since 2013.
Just over 1 in 10 babies born in 2023 were preterm, largely unchanged from the previous year.
Economic Implications
A long-standing trend of declining fertility will impact economic growth and pose future problems. Population change affects schools, economies, and social programs, and the babies born today are the future workforce and seniors.
The slowing U.S. economy in early 2024, with weaker-than-expected GDP growth of 1.6% and rising prices, may further contribute to economic uncertainty and impact fertility decisions. Consumer spending increased at a slower pace of 2.5%, and the personal savings rate decelerated to 3.6% as the higher cost of living and the Fed rate hikes put pressure on consumers, without increasing supply, especially housing supply. The PCE price index, a key inflation measure for the Federal Reserve, rose at a 3.4% annualized pace, its biggest gain in a year.
Remote Work and Labor Market Trends
Morning Consult data shows that the share of workers working full-time has declined by roughly 9 percentage points from its 2022 peak, with labor shortages easing and fewer workers reporting staffing shortages. However, workers remain confident in negotiating higher pay despite slowing nominal wage growth.
A declining share of U.S. employers offers key benefits like health insurance and retirement contributions, particularly in low-skill industries such as food & beverage, leisure & hospitality, and retail. This reduction in remote work opportunities and employee benefits may further fuel the falling birth rate, as workers face increased challenges in balancing work and family life.
Big Picture
The declining U.S. fertility rate, coupled with economic uncertainty and shifts in the labor market, raises important questions about the future of population growth, the economy, and social programs. The reduction in remote work and employee benefits exacerbates the challenges faced by working parents and ends the mini baby boom created by remote work seen during COVID-19.
As financial vulnerability and economic uncertainty rise, whether consumers can continue to fuel the economy throughout 2024 remains to be seen. Policymakers and society will need to grapple with the implications of these demographic changes and evolving labor market trends in the years to come, especially the squandered opportunity of remote work, considering strategies to support families and address the long-term consequences of a shrinking workforce.