Income And Children

News has broken that the (provisional) CDC data for 2023 indicated another drop in the birth rate, continuing a decline started in 2008. Naturally, this is leading to less children.

I’m not panicked over this trend, but I am interested in why it’s happening. Generally, as countries grow richer, their birth rate shrinks; we’ve seen this the world over. However, looking internally, I see an interesting pattern, whereby more income in the U.S. correlates to more children.

To that end, I pulled Census population data, especially the population <5-year-olds. The data as I parse it shows that high-income areas are the only places seeing any aggregate growth in young children, though it’s very minimal.

For this exercise I ranked each Census tract in America on income and the state it’s in, then sorted the tracts into quintiles. The top 20% in the chart below consists of the 20% of highest income tracts for each state. The income for the top 20% of tracts in West Virginia is much lower than the top 20% of tracts in neighboring Maryland, but the goal is to compare tracts on a relative basis. Using the top 20% of Census tracts in the U.S. would overweight wealthy parts of the country and exclude the richest parts of poor states.

The results are striking. From 2013-22 population gain by income quintile are similar, between 4.9% and 7.6%, with the top and bottom quintiles gaining the most population.

By contrast, the top quintile was the only one to see even a tiny gain in population <5-year-olds. The losses grow deeper the lower the income. The bottom quintile shows a full 10.2 percent loss in population <5-year-olds from 2013-2022.

Interestingly, the population <5-year-olds is overrepresented in that bottom quintile, as 18.9% of the population <5-year-olds resides there, vs 17.0% of the total population. However, the share of the population <5-year-olds in the bottom quintile is shrinking, down about a percentage point from 19.9% in 2013.

The data gets a little hinky in 2020, because of the pandemic, and because census tract boundaries move every ten years when the full Census is taken. You can take my word that the 2013-19 and 2020-22 trends are similar, or I can send you the data. This is all publicly available data accessed using the Census’ API.

For those of us in student housing, there are some obvious implications; we already cater to the upper end of the market. There’s every indication that will continue as children from high income areas grow their share of the population.

However, I can’t wrap this analysis up in a neat bow and say more money means more children; the factors affecting birth rates are numerous. I usually point to economics as the biggest impact, but there’s other strong cases around social forces. The book “Motherhood on Ice” by anthropologist Marcia Inhorn is an interesting read.

I think there is a relationship between income and birthrates, but correlation is not causation. There is a trend of people having children later in life, when they often have higher incomes.? That could drive a greater number of children in high-income areas. But I then ask why people are having children later in life; needing the income to afford them could be important. There’s a circular logic there that’s hard to escape. Either way you slice it, I expect these trends to continue in the near term, be its births later in life, lower birth rates, or the child population shifting to high income areas.