A nation’s future economic prosperity rests in large part on the size of the next generation, yet not as many American women are having children, and those who do are having fewer. The replacement rate, or the number of children needed to keep a country’s population stable, is 2.1 births per woman; in the U.S. that figure is now 1.6.
What if an economic shock, of a proportion not seen in a century, could help move the birth rate in a positive direction? That is what the COVID pandemic has the potential to do — not the virus itself, of course, but the technology that allowed people to work from their homes during the lockdown.
“ The flexibility of working from home boosted birth rates during the pandemic. ”
The U.S. experienced a slight uptick in births last year, and remote work could be a factor. New research by Lyman Stone and Adam Ozimek for the Economic Innovation Group found that the remote work phenomenon has spurred several positive, small changes in terms of family formation.
First, the flexibility of working from home boosted birth rates during the pandemic, specifically for more educated women.
Second, unmarried remote workers were more likely to get married than their work-in-person counterparts, with marriage generally leading to childbearing.
Stone and Ozimek also report that for women over 35, particularly those over 39, remote work increased childbearing intentions (as was also the case among women whose household finances improved), with their pregnancy intentions increasing 10%. The biggest effect of remote work they found was that women who already had several children decided to have more.
The U.S. isn’t alone in suffering from low and declining birth rates — most of the developed world, including China, has the same problem. But that’s little comfort given the implications for the U.S. economy writ-large, with fewer (and aging) workers hurting productivity, economic growth, innovation and the ability to pay for programs like Medicare and Social Security.
Although it’s well-understood that economic prosperity and urbanization lead to lower birth rates, researchers are unsure why birthrates have fallen to such dire levels. Possible explanations include: more women with careers; a lack of affordable childcare; a drop in the marriage rate or later marriage, and fewer eligible men compared to educated women (educational mismatch).
“ Remote workers are more productive than those who come into the office.”
Women’s participation in the workforce will remain vital to our continued economic prosperity, especially with a smaller population cohort. U.S. GDP growth has been slow since the 2000s — what former U.S. Treasury Secretary Larry Summers termed “secular stagnation,” only breaking above 3% annual growth twice since then.
Research shows that an increase in women’s participation in paid work increases a country’s GDP and that gender parity globally reduces violent conflict and increases political stability. The Stanford Social Innovation Review found that if women worked in the global economy in proportions equal to men, it would add as much as 26% to annual global GDP.
Women’s prime-age (25 to 54) labor force participation in the U.S. rose steadily to 75% in 2000 from 54% in 1977, then dropping in the dot-com crash of 2001, and flatlining until the Great Recession hit in 2008 when it dropped again. The participation rate returned to 75% until the COVID pandemic hit in 2020, shaving the rate to 63%. Women’s participation rate now is 74%, according to the St. Louis Federal Reserve.
Although there were many, many negatives in the pandemic, there were a few positives such as remote work. It allowed work hours and location to become more flexible, which survey after survey has shown is particularly important for working women — mothers or mothers to be.
Importantly, remote work saved employees one- to two hours per week in commuting time, of which that time was reallocated to their jobs (40%) and moved to caregiving (11%). Work from home may even help reduce inflation, because workers so value flexibility perhaps more than a raise. Remote workers also are more productive than those who come into the office.
As more and more employers are mandating back-to-office policies, more workers (86% in one survey, for example) say they would rather look for another job than go back in person. Given the historic tightness of the labor market, we should hope that they simply switch jobs and not drop out of the labor force entirely.
While not a panacea, the early evidence shows that remote work, especially for women of childbearing age, could be a simple and cost-effective way to help women achieve a work-life balance and increase fertility rates for those who want to have children.
Pro-natalist policies, such as in East Asia, where financial incentives, expanded preschool, and even matchmaking services are being tried, have failed. U.S. employers should take note, and be more willing to continue remote and hybrid work.
DJ Nordquist is the executive vice president of the Economic Innovation Group and former chief of staff at the White House Council of Economic Advisers. She is also a working mother of three.