The Technium

Paying people to have children

The most intractable problem I see in this century is the coming population implosion. (Climate change is a trackable problem; we know what we have to do.) On average, humans are not replacing themselves today, and beginning in a few more decades, there will be fewer humans on this planet every year. nless something changes, the population goes to zero in another century. So far, there is no known solution to raising fertility rates once they have sunk below replacement levels. Nothing we have tried anywhere in the world has worked. Free daycare, apartments, and cash bonuses don’t do it.

A possible solution to the fertility problem that has not been tried yet is paying families a real lot of money — a can’t-ignore-it amount of money — to have children. Millions of dollars!

So far, when countries have awarded cash bonuses to families to have children it has been a few thousand or ten thousand dollars. That amount of bonus has not produced much difference. However if the sum was millions of dollars, it might make a difference.

Last year there were about 3.6 million babies born in the US. If each family was paid $1 million dollars per child that is 3.6 trillion dollars in cost. That is almost the total amount of tax income the US collects, so maybe we only pay for the second or third child onward. How could we afford this?

How can we NOT afford this? The alternative – clearer and clearer each year – is that beyond the peak global population reached somewhere later this century, without intervention, each year the planet will have fewer and fewer people. The average country will be losing population steadily, headed to zero. Immigration just shuffles the declining population around. We have no positive economic system that works for declining populations. (All economic prosperity in history has come with expanding populations.) 

However those countries who are able to persuade people to immigrate, or are able to increase their population via raising fertility rates, will have a decided economic advantage.

How much of an advantage? How much is each additional citizen worth?

We could figure that out and then pay a family just a little less money than what we’d expect that person to produce for society in their lifetime. Let’s say the Total Lifetime Societal Economic Value of One Citizen was $10 million. So we pay the families $8 million, over 21 years, to have and rear a child to adulthood. 

I have not found a formula for determining Total Lifetime Economic Value of a citizen, but I would be surprised if economists didn’t have one.  I would imagine it would range depending on the state of the society’s development. In wrongful-death cases there are formulas for determining the total lifetime earning power of a citizen. These Value of Life calculations are performed to figure out how much safety is worth. If a government can save the life of one person by spending money on safety, how much is that average life worth? How much can they spend to cover it? Of course this varies by geography. For the US the average loss of life in 2020 is officially about $7-10 million. Part of the calculation is reckoning the amount of money that flows to that individual over their lifetime. What we need for this other question of Total Society Life Value is how much money would a functioning citizen create for society in their lifetime? For instance, a citizens’ value is not just what they earn. Simply being a consumer – of goods, of media – is worth something to the whole economy, a value that is not accounted for in lifetime earnings. Being available to serve in a military is worth something. The value of raising children, looking after someone who is sick, volunteering to being a coach, are all contributions that need to be captured by this amount.

If I do the over-simplistic thing of taking the 2020 GDP of $80,000 per capita in the US and multiply it by 100 years (for lifespan) we get a value of $8 million per person, as another way to put a figure on the value of one person. That is roughly the same order of magnitude as calculated by loss of life.

That means that in theory our society should be willing to invest up to $8 million dollars to raise another citizen, in order that they can later contribute $8 million to the economy over their lifetime. That means that the amount of money a state should be offering families to have an additional child should be just shy of $8 million in the US. 

Would you be willing to have a(nother) child for $8 million? I am guessing that would be very tempting for many people who would not even consider having children (or more children) right now. In the absence of other solutions, I suspect that some country somewhere will try this experiment of “investing” into growing its population via large monetary payments.

One possible consequence: If the state was willing to pay that much, say $300,000 per year over 21 years, then a family could make a career out of having children. If they had three or more kids at that rate, both parents could be devoted to rearing children full time. There would be new “trad” families that make their livelihood bringing productive children to the world.

There might be a tendency to pay more for citizens that were presumed to be more productive, such as doctors vs poets, but I think those kind of incentives would warp the output (getting more doctors than you need). But there might be some kind of benchmarks in the latter years to encourage the best citizens we could produce. Your kid needs to stay out of jail, graduate, vote, to get the last payments.

One caveat: Let’s say this program was a rousing success, and ambitious nations paid millions of dollars to birth and raise kids to productive adults. It is possible that some of those adults might want to move away to a place not so ambitious, or structured. Someplace chill. The state might want to demand something in return (two years of mandatory public service?) before you could leave.

Even without that, the advantages of living in a country where prosperity is rising because the population is rising or at least steady, will be a huge incentive to stay. Curiously, and counter-intuitively, the more people there are, the more jobs there are. There are less jobs the more people disappear. A way to ensure there are people around, is to make that investment by paying their full lifetime value to the families who birth them.

[Edited correct calculation for US cost. — 15/01/24]


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