Economic freedom allows women to achieve larger family size

As women desire more children than they actually have, greater economic freedom could open the door for larger family sizes, a new paper suggested.

American women said they would be happiest with 2.5 children, according to recent surveys, but they only reach about 1.7 on average. Replacement fertility is 2.1 children per woman.

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The space in between is called the “fertility gap,” which researchers Clara Piano and Lyman Stone suggested could be driven by state policies that define “economic freedom,” or the degree to which “policies and institutions are supportive of economic freedom defined as personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately owned property.”

“Today, the primary cost of fertility is the cost of the mother’s time,” Piano wrote. “As women’s education and employment opportunities have increased (both good things), the average woman forgoes greater earnings if she chooses to spend time raising children.”

The researchers tracked economic factors such as government spending, taxation, and labor market freedom in all 50 states to score them on their economic freedom. Those scores were compared to desired family size versus achieved family size, and they found that one standard deviation improvement in economic freedom could account for closing the fertility gap by 30%.

In other words, if Minnesota offered greater economic freedom, its fertility rate could look more like that of Kansas.

“While past research on the fertility gap has largely been descriptive or focused on demographic differences across women, we take an institutional approach by investigating how policy environments which give women more control over their economic choices relate to the gap between women’s desired and actual fertility,” wrote Piano, an economics professor at Austin Peay State University, and Stone, a research fellow at the Institute for Family Studies.

Greater availability in job choices and flexible schedules offer women the ability to both bring in income and raise a greater number of children, the research suggested.

Flexibility, along with the growing income parity between men and women, can actually pay dividends in relative happiness achieved by women and the upbringing of children whose parents are both enabled to be more present.

Flexibility will also “reduce the marginal cost of childbearing and childrearing” and increase the ability to have more children.

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Since employees value flexibility and their families, areas with higher levels of economic freedom would be more competitive in offering family-friendly policies, Piano and Stone said.

“Our findings suggest that states interested in pro-family policies should seriously consider looking into measures that expand economic freedom,” Piano wrote. That can also include a less restrictive regulatory environment, including right-to-work laws and occupational licensing requirements, which the paper indicated is associated with a smaller fertility gap.