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Speaker 1: Welcome to How to Money. I'm Joel and today I'm

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Speaker 1: talking the demographic dilemma and your dollars with Melissa Karney. Yeah,

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Speaker 1: demographics or destiny. We've all heard that phrase, right. Looking

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Speaker 1: at current trends can offer insights into what the future

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Speaker 1: might hold. Declining birth rates, rising inequality, and the upting

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Speaker 1: uptick of single parent households is having a profound impact

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Speaker 1: on our society and it's impacting the economy as a whole.

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Speaker 1: We're side stepping the culture war battles on these topics today,

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Speaker 1: but I do want to discuss how current trends and

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Speaker 1: demographic realities are going to affect our society, are going

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Speaker 1: to affect our economic vibrancy and the money choices that

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Speaker 1: we should be making now as individuals. So Melissa Karney

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Speaker 1: is an economist known for her extensive work on social policy, poverty, inequality,

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Speaker 1: and the economics of families and fertility. So a lot

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Speaker 1: to dive into here. She's a pressor of economics at

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Speaker 1: Notre Dame. Melissa, thank you so much for joining me

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Speaker 1: today on the show.

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Speaker 2: Thanks so much for having me.

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Speaker 1: Okay, first question that I ask everybody who comes on

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Speaker 1: is what's your craft beer equivalent. That just means that

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Speaker 1: I like to splurge on fancy craft beer from time

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Speaker 1: to time, but I'm not doing it at the expense

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Speaker 1: of my financial future. Do you have something like that

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Speaker 1: in your life that people might think is a little offbeat,

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Speaker 1: But you're spending quite a bit of money on in

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Speaker 1: the here and now.

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Speaker 2: Okay, maybe not offbeat, but definitely indulgent and probably a

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Speaker 2: little embarrassing. And when my husband looks at our family

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Speaker 2: app he's always a little horrified how much I spend

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Speaker 2: at the hair salon. So I'm just gonna admit it, Okay,

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Speaker 2: cause a lot of money to keep my hair from

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Speaker 2: getting gray. I want to be the person who's okay

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Speaker 2: with it, but I spend a lot of money at

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Speaker 2: the hair salon.

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Speaker 1: No shame in that game, you know, I'm a little

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Speaker 1: bit of shamed. I'm not judging. I'm not judging. Okay.

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Speaker 1: That's fascinating, and you know it's amazing some people the

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Speaker 1: grays come in and they look incredible women and men,

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Speaker 1: and you're just like, how how does how do we

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Speaker 1: pull off the gray like that?

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Speaker 2: And I want to be that person, but but I'm

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Speaker 2: not it.

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Speaker 1: Sometimes, right, Okay, let's let's get to the meat of

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Speaker 1: the topic. Like you, you're avoiding the culture war stuff

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Speaker 1: in your book that came out a couple of years ago,

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Speaker 1: And I appreciate that you're you're really not trying to

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Speaker 1: castigate anyone, You're not trying to throw anybody under the

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Speaker 1: bus here. But what drove you specifically into touching on

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Speaker 1: some of these really tough economic topics that maybe send

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Speaker 1: people into a tailspin when they start kind of thinking

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Speaker 1: about them.

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Speaker 2: Yeah, so I've so the book you're referring to, the

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Speaker 2: two parent privilege I wrote a couple of years ago,

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Speaker 2: really to call attention to what's happened to families and

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Speaker 2: marriage in the US over the past forty years as

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Speaker 2: an economic matter, Right, So you're right, there's plenty of

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Speaker 2: culture wars about marriage, and as an economist, I have

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Speaker 2: nothing to say about whether somebody should or should not

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Speaker 2: get married. But what I have a lot to say about,

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Speaker 2: and what the data has a lot to say about,

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Speaker 2: is how the decline in marriage in the US over

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Speaker 2: the past forty years has impacted economic security and inequality.

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Speaker 2: And so you know, as somebody who's spent my career

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Speaker 2: studying poverty and inequality. It got to the point where

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Speaker 2: I wrote this book because this is such you know,

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Speaker 2: how we choose to form our families and whether or

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Speaker 2: not we choose to get marriage has really profound implications

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Speaker 2: for our economic security and that of children.

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Speaker 1: So basically became like an unavoidable topic, like the elephant

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Speaker 1: in the room.

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Speaker 2: One hundred percent. It was always the elephant in the

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Speaker 2: room in academic and policy conversations about inequality in particular

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Speaker 2: and social mobility, which obviously there's been a lot of

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Speaker 2: attention to in recent years for good reason. But it

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Speaker 2: was despite mounds of academic, rigorous evidence showing how predictive

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Speaker 2: family structure was at both an individual and community level,

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Speaker 2: these conversations, it just was somewhat easier and more tractable

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Speaker 2: to talk about the problems of schools or holes in

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Speaker 2: the government safety net. And so, as you said, it

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Speaker 2: was the elephant in the room. And so that's why

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Speaker 2: that's why I wrote the book.

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Speaker 1: And most people were saying, I'm not going to touch

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Speaker 1: it with a ten foot poll, and you were like,

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Speaker 1: let me at it. I'm going to get in there,

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Speaker 1: I'm going to write the book on it, and I'm

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Speaker 1: going to take all the flag for it too.

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Speaker 2: I don't know. I wasn't naive going in. I knew

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Speaker 2: it would be I mean, I knew a little bit

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Speaker 2: that I was, you know, walking on land mines. But

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Speaker 2: I was hopeful enough that there was a way to

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Speaker 2: talk about the issue with empathy, talk about the issue

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Speaker 2: that was not sort of tinged with the judgmental, really

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Speaker 2: ugly ways that sort of the conversation has sometimes happened

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Speaker 2: in the past. Yeah, and felt like, Okay, we can

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Speaker 2: do this, we can have a you know, a civil,

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Speaker 2: evidence based conversation. And I will say, for the most part,

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Speaker 2: I've been really pleased with how that went. Like, yeah, sure,

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Speaker 2: there were plenty people who didn't like the book before

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Speaker 2: they read it, or we'll never read it, but wrote

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Speaker 2: some scathing essay based on the title of premise alone.

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Speaker 2: But for the most part, I felt like the reception

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Speaker 2: I got made me think, gosh, really, this was a

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Speaker 2: conversation America wanted to have. People were having this around

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Speaker 2: their dinner tables. A lot of teachers and pediatricians wrote

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Speaker 2: to me saying, yeah, this is what we're seeing. Thanks

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Speaker 2: for like sort of launching the national conversation. So so

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Speaker 2: I actually was pretty pleased.

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Speaker 1: Yeah, it was a conversation that needed to be had,

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Speaker 1: and I feel like you sparked it in so many ways,

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Speaker 1: And I want to dig into that topic in particular,

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Speaker 1: but I want to get into some other stuff with

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Speaker 1: you as well. But one thing I'm curious about, based

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Speaker 1: on the research that you're doing, I feel like the

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Speaker 1: world is inundated with bad news. We're going to cover

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Speaker 1: some bad news and some bad trends right now, but

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Speaker 1: before we go too far down that path, are there

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Speaker 1: any good trends that you've been researching lately that are

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Speaker 1: worth highlighting that you seeing on the economic front where

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Speaker 1: you're like, dang, that kind of surprised me in a

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Speaker 1: positive way.

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Speaker 2: We are, Yes, there's actually a lot of good news

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Speaker 2: and it gets buried. I mean, you know, we should

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Speaker 2: always be looking for ways to improve society and make

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Speaker 2: life better for people. So I think as researchers or

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Speaker 2: people who focus on policy problems, there's a tendency to

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Speaker 2: focus on the bad news. There's lots of good news.

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Speaker 2: I mean, Americans are sort of crazy rich compared to

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Speaker 2: previous generations and to countries around the world. I mean,

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Speaker 2: media and household income is in the US is so

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Speaker 2: much higher than in Europe. It's so much higher than

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Speaker 2: it was twenty years ago. Even at the bottom of

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Speaker 2: the distribution, workers are making higher wages than in the past.

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Speaker 2: I think that gets lost a lot. But fundamentally Americans

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Speaker 2: are in very good position when it comes to income, wages,

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Speaker 2: household wealth, you know, living standards. Of course, medical advances

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Speaker 2: and technologlogies are incredible. Again, there's always I can't help myself.

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Speaker 2: I am a scholar, so I put a footnote on everything.

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Speaker 2: There are class divides in all of this. People without

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Speaker 2: college degrees are falling behind people with college degrees. But

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Speaker 2: in general, across the distribution, Americans are in quite good shape.

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Speaker 1: Why do you think there's so much pessimism? Individual pessimism,

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Speaker 1: like cultural pessimism. It does seem like when you look

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Speaker 1: at some of the trial I think inflation was one

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Speaker 1: of those things. It just got people riled up, right,

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Speaker 1: and they were like, my eggs cost more, and I

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Speaker 1: get it. Like I was at the grocery store just

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Speaker 1: this past weekend and beef prices we're insane. I was like,

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Speaker 1: I need to just cut steak out of my diet completely.

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Speaker 1: It's too expensive. But why do you think there is

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Speaker 1: so much pessimism given kind of the data reflecting overall

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Speaker 1: solid trends.

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Speaker 2: I mean, this is now we can all conjecture as

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Speaker 2: well as the next person as to why there's so

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Speaker 2: much pessimism. I think part because we are accustomed in

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Speaker 2: this country to things just sort of getting better, and

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Speaker 2: people get used to things being good, right, so there

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Speaker 2: are things like what behavioral economists would call loss a version.

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Speaker 2: We get very upset when you know, if beef might

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Speaker 2: have been more expensive in the past, but when we

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Speaker 2: were used to paying lower prices for it and all

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Speaker 2: of a sudden it becomes more expensive. Now we're particularly upset.

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Speaker 2: So there is some of that that we just have

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Speaker 2: grown accustomed to things constantly getting better, and so things

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Speaker 2: that set us off that course have sort of outsized

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Speaker 2: impact on our psyche. I can't help but speculate, and

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Speaker 2: this is not my era of expertise, but we are

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Speaker 2: inundated with social media and messages that just bombard us

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Speaker 2: with the bad news that it's easy to lose sight

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Speaker 2: of the good news. And you know, one sort of

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Speaker 2: survey finding that I think always emphasizes that is when

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Speaker 2: you see surveys of how happy people are with their

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Speaker 2: own lives versus how they think things are going in

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Speaker 2: the country. People generally tend to be happier with their

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Speaker 2: own lives, and so it's almost like, well, things are

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Speaker 2: pretty well, going pretty well for me, but I see

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Speaker 2: all these stories that make me think it's not going

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Speaker 2: well for other people in the country.

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Speaker 1: Yeah, it's kind of like, oh, I love my congress person,

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Speaker 1: but the rest of them, we're terrible. It should all

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Speaker 1: be thrown out. Yeah, and I agree, those are fascinating

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Speaker 1: things to see. It's like, I think I'm actually doing okay,

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Speaker 1: but everyone else out there is having a tough time,

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Speaker 1: and it makes you feel like just there's doom and

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Speaker 1: gloom around you, when maybe it's not nearly the extent

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Speaker 1: that you might think.

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Speaker 2: But can I say one thing on this, because one

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Speaker 2: of the demographic issues that I've been thinking and writing

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Speaker 2: and studying a lot about in the past few years,

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Speaker 2: aside from the decline in marriage and the rise in

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Speaker 2: single parent families, is just the decline in fertility. And

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Speaker 2: I am always amazed when I'm talking to young people,

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Speaker 2: college age people about what's going on with the birth rates,

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Speaker 2: how low they are Inevitably they tell me how worried

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Speaker 2: they are about the future, and then I'm like the

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Speaker 2: old lady, being like, you guys have it so good,

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Speaker 2: but it is sort of remarkable in a worrying sense,

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Speaker 2: why this generation of young adults in particular seems to

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Speaker 2: be pessimistic when really their future is quite right.

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Speaker 1: Yeah, yeah, I think we need a reminder every now

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Speaker 1: and again. I was talking to an immigrant from Cuba

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Speaker 1: recently and just to hear his experience growing up and

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Speaker 1: living in Cuba, and then what it's been like these

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Speaker 1: past four years since his family has been in the

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Speaker 1: United States, and it hasn't been like easy, right, but

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Speaker 1: just the access he has to be able to start

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Speaker 1: a business or live life in the way he wants

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Speaker 1: is completely different, and I think maybe hearing more of

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Speaker 1: those stories would benefit all of us. Okay, let's talk

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Speaker 1: about families for a little bit. I'm curious, based on

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Speaker 1: your research and just kind of the trends you've seen,

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Speaker 1: how much have family structures change over the last couple

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Speaker 1: of generations, And do you have an idea of why

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Speaker 1: the family structure has changed so significantly overall?

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Speaker 2: So let me focus on kids and their living arrangements.

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Speaker 2: So since nineteen eighty there's been a decline in the

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Speaker 2: share of kids living in married parent homes, falling from

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Speaker 2: about eighty percent to about sixty three percent. So now

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Speaker 2: at a point in time, only about sixty three percent

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Speaker 2: of kids live with married parents. It's not that so

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Speaker 2: many of them are living instead in sort of cohabiting parents.

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Speaker 2: Only about eight percent of kids live with one of

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Speaker 2: their biological parents and their parents partner. Meant often that's

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Speaker 2: not actually their second biological parent, but rather we have

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Speaker 2: about one in five kids in the US lives with

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Speaker 2: an unpartnered mother, meaning a mom with no other spouse

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Speaker 2: or significant other in the home. That's often a very

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Speaker 2: economically vulnerable situation, which is why this is relevant to

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Speaker 2: issues of poverty and inequality. This is a sea change

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Speaker 2: in the way kids are being raised in the US right.

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Speaker 2: The fact that just over sixty percent of kids are

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Speaker 2: living in married parent homes is really most of the

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Speaker 2: change happened in the eighties, nineties, early two thousands, but

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Speaker 2: that's where we are now, which is very different than

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Speaker 2: where we were forty fifty years ago. The other really

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Speaker 2: important facet of this trend is that this has happened

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Speaker 2: almost entirely outside the college educated class. So the decline

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Speaker 2: and the share of kids living with married parents for

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Speaker 2: those who are born to moms with a four year

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Speaker 2: college degree has only fallen from ninety percent to eighty

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Speaker 2: six percent, like a tiny decrease, even as more and

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Speaker 2: more moms are getting college So that's like a less

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Speaker 2: selective group. But outside the college educated class, kids born

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Speaker 2: to moms with a high school degree or less, or

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Speaker 2: maybe some college but not a four year degree, you know,

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Speaker 2: we're getting below sixty percent of them are living in

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Speaker 2: married parent homes. So there's this real college gap now

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Speaker 2: in the way kids are living being raised, and that

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Speaker 2: mirrors a college gap in marriage rates. So if you

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Speaker 2: think back to the sixties and seventies, when we had

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Speaker 2: the Cultural Revolution and a lot of institutional, legal, cultural changes,

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Speaker 2: marriage sort of fell for everybody regardless of education level.

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Speaker 2: But then going into the eighties, nineties, early two thousands,

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Speaker 2: it didn't. It's stabilized among college educated adults and continued

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Speaker 2: to plummet for people without college degrees. That starts to

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Speaker 2: give us a hint as to what caused this. So,

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Speaker 2: in very broad strokes, my read of all of The

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Speaker 2: evidence and literature is that we had these really dramatic

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Speaker 2: changes in the sixties and seventies that set us up

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Speaker 2: with new social norms. It was more acceptable to not

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Speaker 2: be married or have kids outside of marriage. And then

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Speaker 2: you go into the eighties and nineties when there's a

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Speaker 2: whole bunch of economic shocks that are pretty bad for

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Speaker 2: relatively bad for men without college degrees. So if you

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Speaker 2: take an economic view of marriage, a very non romantic view,

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Speaker 2: but essentially, we're making a contract with you know, long

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Speaker 2: term contract with someone to pool our resources. At the

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Speaker 2: same time as women now have more economic opportunities and autonomy,

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Speaker 2: and again among those without college degrees, the men are

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Speaker 2: sort of their their employment rates are falling, their earnings

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Speaker 2: both you know, relative to women is falling. They become

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Speaker 2: less desirable as economic partners. Some of them might feel

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Speaker 2: less ready or inclined to be an economic provider for

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Speaker 2: a family, and we just see a decoupling of marriage

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Speaker 2: and having kids in those in those affected populations.

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Speaker 1: I know it's not a sexy topic to talk about

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Speaker 1: marriage as an economic reality, it is right.

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Speaker 2: It has always been like from the beginning of time,

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Speaker 2: marriage has always been an economic arrangement, and I.

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Speaker 1: Feel like we primarily view it through the lens of

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Speaker 1: love companionship, and those are wonderful things, but there's an

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Speaker 1: economic reality for the rest of your life present to

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Speaker 1: tying your life to the fate of someone else too.

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Speaker 1: Why do you think that doesn't get talked about enough?

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Speaker 1: And like, yeah, I don't know, can you put it

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Speaker 1: maybe into perspective for us, how big of an economic commitment?

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Speaker 2: It is really a modern concept that people are getting

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Speaker 2: married out of, you know, primarily for love and their

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Speaker 2: own adult human flourishing. Again, I don't write about this

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Speaker 2: in the book because I just write about marriages through

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Speaker 2: an economic lens, but that really is a modern conception

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Speaker 2: of marriage. And so if you just strip marriage down

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Speaker 2: to its economic elements, and there's really no denying that

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Speaker 2: it is in large part in economic decision and commitment.

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Speaker 2: You have two people who are making a commitment to

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Speaker 2: share their resources, to pool their resources, and to jointly

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Speaker 2: contribute I'll use my boring economic language, but to like

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Speaker 2: producing a household, or if there's children, to raising children

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Speaker 2: and then jointly consuming things. And so you know, there's

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Speaker 2: a lot of benefits to this because now if you're

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Speaker 2: two people forming one household, there's economies of scale, of course, right,

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Speaker 2: we just need one household and all the things we

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Speaker 2: share in a household, so it's very beneficial from that.

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Speaker 1: I remember being so excited when we got married to

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Speaker 1: go from having two apartments that were renting to living

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Speaker 1: under one roof and being like, wow, think about how

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Speaker 1: much more money we're going to have to surround other

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Speaker 1: stuff we care about.

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Speaker 2: There's totally economies of scale. There's also when we you know,

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Speaker 2: think about this again from a very economic position, and

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Speaker 2: when kids are involved, there's specialization, so you can also

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Speaker 2: it's not even just that you're pooling the resources of

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Speaker 2: two people, but you're specializing. Okay, Like what does that mean.

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Speaker 2: It used to be that men would specialize in working

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Speaker 2: outside the home and women would specialize in household production

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Speaker 2: and childcare. Today, you know, the majority of women, the

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Speaker 2: majority of married women, the majority of mothers work and

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Speaker 2: so it's less about specialization let's say in and out

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Speaker 2: of the home. But even within the home, you can

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Speaker 2: imagine that. I mean, I'll be you know, terribly heteronormative

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Speaker 2: about this, but like my husband, you know, he will

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Speaker 2: take care of mowing the yard or bringing out the garbage,

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Speaker 2: or he also deals with dealing with all the health

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Speaker 2: insurance and car insurance and car repairs and that kind

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Speaker 2: of thing. And I will deal more with like meal

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Speaker 2: planning or grocery shopping. And every time you go to

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Speaker 2: the grocery store again, am I allowed to stereotech? How

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Speaker 2: many times do you see a guy on the aisle

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Speaker 2: calling someone back home, being like they don't have that kind?

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Speaker 2: What kind should I buy? Instead? And I think that's me.

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Speaker 1: I'm the one who shops at the grocery store, but

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Speaker 1: I'm calling because I've got questions.

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Speaker 2: Because you've specialized, and so when you have household specialization,

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Speaker 2: you also can do more things than two people so

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Speaker 2: separately just combined. But there's also a wonderful insurance component

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Speaker 2: of a married unit as an economic unit. If one

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Speaker 2: person loses their job or is injured or sick, there's

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Speaker 2: another person in the household who can pick up some work,

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Speaker 2: or pick up some hours, or do some more of

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Speaker 2: the resources. So there's also a resource insurance component there

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Speaker 2: when two people have pooled their resources in marriage.

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Speaker 1: Do you think the decline in marriage and the subsequent

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Speaker 1: impact on kids is this and families as a whole.

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Speaker 1: Is this like a preferences issue or is this like

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Speaker 1: a response to more economic constraints because you talked about

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Speaker 1: maybe some younger men not feeling like they could provide

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Speaker 1: for a family, like are the economic hurdles more significant?

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Speaker 1: And so people are saying, I'm just going to punt

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Speaker 1: on marriage for a while until i feel like I'm

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Speaker 1: economically ready to commit to that.

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Speaker 2: It's this is a very thorny complicated question, but a

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Speaker 2: really important one. Again, my read of the evidence is

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Speaker 2: that what we're seeing in terms of the reduction in

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Speaker 2: marriage and the decoupling of you know, having kids inside marriage, again,

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Speaker 2: this is almost entirely outside the college educated class. It

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Speaker 2: reflects both changed social norms and changed economic realities, and

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Speaker 2: those two things accentuate and amplify each other. So you

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Speaker 2: see in places where like non marital childbearing or having

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Speaker 2: kids out, you know, raising kids outside a married parent home,

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Speaker 2: where that's more common. Even when there's an economic a

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Speaker 2: positive economic shock, right, you don't get the increase in marriage.

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Speaker 2: So I'll be very specific here. So you know, for

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Speaker 2: a long time I was of the view that it

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Speaker 2: was primarily an economic challenge and if we could only

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Speaker 2: improve the economic position of men without college degrees, we

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Speaker 2: would see a return to a higher level of marriage

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Speaker 2: and a reduction and the share of kids born outside marriage.

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Speaker 2: And then one thing happened actually in the early two

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Speaker 2: thousands that was actually good for the economic position of

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Speaker 2: non college educated men in both an absolute level and

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Speaker 2: relative to women. And that was the fracking boom. So

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Speaker 2: in a lot of communities where fracking was sort of

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Speaker 2: accessible because of the geology and all of that. So

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Speaker 2: what happened in these places, Let's say Texas, you get

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Speaker 2: an increase in fracking, and it's not just good for

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Speaker 2: fracking workers, but it leads to local economic booms. There's

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Speaker 2: just more jobs, and in particular, we see more jobs

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Speaker 2: for men without college degrees, so we can confirm that

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Speaker 2: that's great. And then it looks like people did have

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Speaker 2: more kids, and we actually have lots of evidence that

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00:20:45,760 --> 00:20:48,199
Speaker 2: kids are what economists call normal goods, and you got

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Speaker 2: a positive income shock. One of the things people spend

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Speaker 2: money on is having kids. Okay, but to my surprise,

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Speaker 2: there was not an increase in marriage, and there wasn't

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Speaker 2: a reduction in the share of kids born outside marriage,

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Speaker 2: And so that surprised me, and so then we looked

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Speaker 2: back my co author Riley Wilson and I we looked

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Speaker 2: back at what happened during the coal boom of the

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Speaker 2: nineteen seventies and eighties, when similar communities and like rural

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Speaker 2: Appalachia were affected, and you saw the earnings of men

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00:21:15,240 --> 00:21:17,720
Speaker 2: went up. What you saw then was an increase in

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Speaker 2: marriage and a reduction in the share of children born

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Speaker 2: outside marriage. Okay, this contrast is super interesting because it

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Speaker 2: suggests that a very similar economic shock had different effects

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Speaker 2: on family formation based on the new prevailing social paradigm.

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Speaker 2: And even in the modern context, when you saw, like

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Speaker 2: you know, in the fracking communities were non marital childbearing

397
00:21:42,640 --> 00:21:45,320
Speaker 2: was less common, then you did get more of an

398
00:21:45,320 --> 00:21:47,760
Speaker 2: increase in marital burst than non marital bursts. So I

399
00:21:47,800 --> 00:21:51,200
Speaker 2: think it's both. I think we've sort of normalized as

400
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Speaker 2: a society, and in some sense for good reason, because

401
00:21:54,320 --> 00:21:56,800
Speaker 2: in the past, single moms and their kids were ostracized

402
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Speaker 2: from the communities, and nobody wants to go back to that.

403
00:21:59,320 --> 00:22:01,920
Speaker 2: We should definitely want to go back to that. But

404
00:22:01,960 --> 00:22:07,160
Speaker 2: in some sense we've so normalized this idea of people

405
00:22:07,240 --> 00:22:10,640
Speaker 2: raising kids not together or not sharing you know, having

406
00:22:10,640 --> 00:22:14,920
Speaker 2: the commitment of a shared household that even now, if

407
00:22:14,960 --> 00:22:17,840
Speaker 2: the economic situation of these memore to improve and the

408
00:22:17,920 --> 00:22:23,040
Speaker 2: incentives for marriage were greater without a changing recognition or

409
00:22:23,160 --> 00:22:25,840
Speaker 2: changing social norms, I'm less confident that what we would

410
00:22:25,880 --> 00:22:27,360
Speaker 2: see are reversal of trends.

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Speaker 1: I would think a basic response to maybe some of

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Speaker 1: your work would be, well, yeah, I mean, part of

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Speaker 1: the reason that two parent households are for better opportunities

414
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Speaker 1: for kids is because, especially in today's day and age,

415
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Speaker 1: both mom and dad are both partners, are working, right,

416
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Speaker 1: and so there's more money coming in. So of course, yeah,

417
00:22:48,520 --> 00:22:51,840
Speaker 1: those kids are going to be better off. But you

418
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Speaker 1: would say it's not all about the income, right, it

419
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Speaker 1: goes beyond just the amount of money coming into the household.

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Speaker 1: There's something about two parents stability.

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Speaker 2: Right, Yeah, that's right. So it's we again, I'm basing

422
00:23:05,960 --> 00:23:09,560
Speaker 2: this on a lot of statistical evidence, so we can

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Speaker 2: see that a big part of the benefit for kids

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Speaker 2: of growing up in a household with two adults is

425
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Speaker 2: just that there's more income coming in. And so you know,

426
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Speaker 2: if you have more income coming in, you're more likely

427
00:23:20,200 --> 00:23:22,760
Speaker 2: to live in a good neighborhood with good schools and

428
00:23:22,800 --> 00:23:26,200
Speaker 2: have lots of these extra you know, great opportunities to advance,

429
00:23:26,240 --> 00:23:31,399
Speaker 2: to obtain higher levels of education. But even comparing families

430
00:23:31,440 --> 00:23:33,840
Speaker 2: with the same level of income in one versus two

431
00:23:34,520 --> 00:23:38,000
Speaker 2: parents in that household, kids who have two parents, especially

432
00:23:38,400 --> 00:23:41,439
Speaker 2: for all of their childhood, just have better outcomes in

433
00:23:41,520 --> 00:23:44,160
Speaker 2: the sense of being more likely to stay on track

434
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Speaker 2: in school, being more likely to get a four year degree,

435
00:23:47,040 --> 00:23:49,440
Speaker 2: being more likely to have higher earnings as an adult.

436
00:23:49,720 --> 00:23:52,359
Speaker 2: What are some of the mechanisms driving that. Well, anyone

437
00:23:52,359 --> 00:23:55,560
Speaker 2: who has kids knows that what parents do is more

438
00:23:55,640 --> 00:24:00,399
Speaker 2: than just provide for them. Provide shelter, pay for the things,

439
00:24:00,880 --> 00:24:05,000
Speaker 2: You supervise them, You help them with their homework, you know,

440
00:24:05,280 --> 00:24:07,840
Speaker 2: you try to teach them lessons. There's all sorts of

441
00:24:07,880 --> 00:24:09,160
Speaker 2: things that parents do that.

442
00:24:09,119 --> 00:24:13,000
Speaker 1: Are helpful chauffeur regularly show for regularly.

443
00:24:12,520 --> 00:24:15,359
Speaker 2: But that also really contributes to the activities. So you

444
00:24:15,400 --> 00:24:18,120
Speaker 2: see kids now who are growing up in single parent

445
00:24:18,160 --> 00:24:21,280
Speaker 2: homes or you know, lower resource homes, they don't even

446
00:24:21,359 --> 00:24:25,960
Speaker 2: have access to the same extracurricular activities. And here's where

447
00:24:26,000 --> 00:24:28,800
Speaker 2: to your point, like, you know, it's tricky to talk

448
00:24:28,840 --> 00:24:33,159
Speaker 2: about these things, but it's foolish to try and deny

449
00:24:33,280 --> 00:24:35,520
Speaker 2: that a parent trying to do all of this by

450
00:24:35,560 --> 00:24:39,160
Speaker 2: themselves is not at a disadvantage. And I say that

451
00:24:39,240 --> 00:24:43,080
Speaker 2: with full empathy, Like, even as a married mom, it's

452
00:24:43,200 --> 00:24:45,080
Speaker 2: really hard to feel like I have time to drive

453
00:24:45,119 --> 00:24:47,399
Speaker 2: my kids to all their practices or get dinner on

454
00:24:47,440 --> 00:24:50,480
Speaker 2: the table after work. It's that much harder if you

455
00:24:50,560 --> 00:24:55,720
Speaker 2: don't have another parent contributing reliably on a daily basis

456
00:24:55,800 --> 00:24:58,000
Speaker 2: to picking up some of the slack, running to the

457
00:24:58,040 --> 00:25:01,200
Speaker 2: grocery store, driving the kids around, helping one do the

458
00:25:01,240 --> 00:25:03,640
Speaker 2: homework while you're trying to make dinner, all the while

459
00:25:03,680 --> 00:25:05,720
Speaker 2: having to bring in enough money to pay all the bills.

460
00:25:06,200 --> 00:25:08,520
Speaker 1: If my wife has gone for four or five days

461
00:25:08,640 --> 00:25:11,920
Speaker 1: on a trip with friends, like my level of patience declines,

462
00:25:12,280 --> 00:25:15,359
Speaker 1: my level of mental insanity increases. And I'm just I

463
00:25:15,680 --> 00:25:18,159
Speaker 1: it gives me a lot of empathy and respect for

464
00:25:18,240 --> 00:25:22,720
Speaker 1: people who are single parenting out there, because it's really tough.

465
00:25:22,800 --> 00:25:26,679
Speaker 2: The emotion, like what you just mentioned is is what

466
00:25:26,720 --> 00:25:28,919
Speaker 2: I refer to in the book is emotional bandwidth. And

467
00:25:28,960 --> 00:25:31,800
Speaker 2: there's lots of evidence on that too, less from economics,

468
00:25:31,880 --> 00:25:35,480
Speaker 2: but more from psychology and sociology. People showing that just

469
00:25:36,080 --> 00:25:40,560
Speaker 2: you know, the level of cognitive bandwidth, emotional bandwidth, the

470
00:25:40,680 --> 00:25:43,560
Speaker 2: absence of measures of stress, those are all much higher

471
00:25:44,119 --> 00:25:46,760
Speaker 2: if there are chief parents in the households. We you know,

472
00:25:46,920 --> 00:25:51,000
Speaker 2: we can't get this far in the conversation without acknowledging

473
00:25:51,040 --> 00:25:53,440
Speaker 2: the fact that there are some couples that are toxic.

474
00:25:53,600 --> 00:25:56,520
Speaker 2: And of course when there's violence or abuse, nobody benefits

475
00:25:56,880 --> 00:25:59,840
Speaker 2: from the preservation or the formation of that kind of relation.

476
00:26:00,520 --> 00:26:03,600
Speaker 2: So let you know, I want to be exceptionally clear

477
00:26:03,760 --> 00:26:06,240
Speaker 2: that I am not talking about those situations.

478
00:26:06,359 --> 00:26:08,280
Speaker 1: All right, we got so much more to talk about

479
00:26:08,280 --> 00:26:12,200
Speaker 1: with you, Melissa, including inequality. It's a hot topic these days.

480
00:26:12,240 --> 00:26:13,960
Speaker 1: But how's that impacting our society and how's that going

481
00:26:14,000 --> 00:26:16,400
Speaker 1: to impact our personal finances? We'll talk about that right

482
00:26:16,400 --> 00:26:26,240
Speaker 1: after this. Are back from the break, still talking about

483
00:26:26,520 --> 00:26:31,280
Speaker 1: demographics and your money with Melissa Karney. Melissa, inequality is

484
00:26:31,320 --> 00:26:32,960
Speaker 1: an issue that gets a ton of press these days.

485
00:26:33,000 --> 00:26:35,640
Speaker 1: I feel like he gets talked about all the time,

486
00:26:35,640 --> 00:26:38,440
Speaker 1: and rightly so in so many ways. How are maybe

487
00:26:38,520 --> 00:26:42,240
Speaker 1: like these family trends impacting arising inequality.

488
00:26:42,760 --> 00:26:46,400
Speaker 2: I mean, it's very very mechanical and obvious on once

489
00:26:46,440 --> 00:26:49,360
Speaker 2: you see it. So let me put it this way,

490
00:26:49,440 --> 00:26:52,240
Speaker 2: over the past forty years, two things have happened to

491
00:26:52,400 --> 00:26:57,359
Speaker 2: people with college degrees. Their earnings have gone up, right beautifully.

492
00:26:57,520 --> 00:26:59,639
Speaker 2: We know this, like, earnings have gone up about sixty

493
00:26:59,680 --> 00:27:02,320
Speaker 2: percent for workers with a college degree. And you have

494
00:27:02,400 --> 00:27:05,480
Speaker 2: college educated workers marrying each other and raising kids in

495
00:27:05,520 --> 00:27:08,480
Speaker 2: a household together, so their household earnings have gone up

496
00:27:08,920 --> 00:27:11,960
Speaker 2: by like sixty percent, and they're really high, right because

497
00:27:11,960 --> 00:27:16,119
Speaker 2: you have two high earners pooling resources, pouring them into kids.

498
00:27:16,720 --> 00:27:19,480
Speaker 2: And then outside the college educated class, if you just

499
00:27:19,480 --> 00:27:22,760
Speaker 2: look at people with high school degrees, depending on how

500
00:27:22,800 --> 00:27:25,639
Speaker 2: you want to measure things, their earnings have sort of

501
00:27:25,680 --> 00:27:30,720
Speaker 2: stagnated or increased by a little bit, but they're much

502
00:27:30,760 --> 00:27:33,240
Speaker 2: more likely now to only have one adult in the household.

503
00:27:33,400 --> 00:27:36,000
Speaker 2: I mean, to be specific, they're twenty three percentage points

504
00:27:36,000 --> 00:27:38,280
Speaker 2: more likely to only have one adult in the household.

505
00:27:38,560 --> 00:27:42,520
Speaker 2: So if you take basically stagnant or just small increases

506
00:27:42,560 --> 00:27:46,240
Speaker 2: in earnings and you combine that with an increase in

507
00:27:46,280 --> 00:27:49,080
Speaker 2: the likelihood that you only have one adult rather than

508
00:27:49,080 --> 00:27:52,399
Speaker 2: two in the household, now you just made the economic

509
00:27:52,440 --> 00:27:56,560
Speaker 2: insecurity of the middle class that much worse, because even

510
00:27:56,600 --> 00:28:00,000
Speaker 2: if your earnings held constant, you just lost the second person,

511
00:28:00,040 --> 00:28:02,080
Speaker 2: and as compared to you know, thirty years ago, when

512
00:28:02,080 --> 00:28:02,600
Speaker 2: there would.

513
00:28:02,400 --> 00:28:04,760
Speaker 1: Have been two of you, the economies of scale got worse.

514
00:28:04,960 --> 00:28:08,080
Speaker 2: You just lost like fifty sixty seventy thousand dollars because

515
00:28:08,320 --> 00:28:13,040
Speaker 2: you're the only person there. And so yeah, so I

516
00:28:13,040 --> 00:28:15,159
Speaker 2: don't know why that doesn't get more attention when we

517
00:28:15,200 --> 00:28:19,119
Speaker 2: talk about sort of the economic insecurity of people without

518
00:28:19,160 --> 00:28:22,439
Speaker 2: college degrees, A lot of that is just reflective of

519
00:28:22,480 --> 00:28:25,439
Speaker 2: the fact that now they're trying to make ends meet

520
00:28:25,560 --> 00:28:29,440
Speaker 2: without the benefit of a second adult bringing resources into

521
00:28:29,440 --> 00:28:33,200
Speaker 2: the household, and so it's very mechanical. People often will

522
00:28:33,240 --> 00:28:38,360
Speaker 2: talk about assortative mating, meaning people marry people like themselves

523
00:28:38,440 --> 00:28:41,960
Speaker 2: in an economic sense. So college educated workers are likely,

524
00:28:42,120 --> 00:28:45,520
Speaker 2: college educated adults are likely to marry other college educated adults.

525
00:28:45,760 --> 00:28:49,360
Speaker 2: People without you know, college degrees are likely to marry

526
00:28:49,520 --> 00:28:53,000
Speaker 2: other people without college degrees. Just there's a lot of

527
00:28:53,040 --> 00:28:55,920
Speaker 2: reasons for that, in part because of the circles people

528
00:28:56,000 --> 00:29:00,600
Speaker 2: run in. But what people have shown is it's almost

529
00:29:00,680 --> 00:29:03,280
Speaker 2: less about the like marrying each other that has contributed

530
00:29:03,320 --> 00:29:07,160
Speaker 2: to widening inequality, and more about the highly educated marrying

531
00:29:07,240 --> 00:29:10,400
Speaker 2: each other and the less highly educated not even getting

532
00:29:10,400 --> 00:29:11,160
Speaker 2: married anymore.

533
00:29:11,840 --> 00:29:14,920
Speaker 1: To talk to you just about inequality from an overall standpoint,

534
00:29:14,960 --> 00:29:19,160
Speaker 1: because when it's written about oftentimes it's it's made out

535
00:29:19,200 --> 00:29:22,760
Speaker 1: to be a terrible thing. Right, Any inequality is bad.

536
00:29:23,000 --> 00:29:26,320
Speaker 1: Equality in and of itself is a is a good thing.

537
00:29:26,880 --> 00:29:31,280
Speaker 1: But zero inequality doesn't seem like a great goal either, right, Like,

538
00:29:31,360 --> 00:29:33,920
Speaker 1: what leads to inequality? How much is okay? And how

539
00:29:34,000 --> 00:29:37,080
Speaker 1: much is actually maybe a good thing from an economic perspective.

540
00:29:37,880 --> 00:29:42,000
Speaker 2: Okay, that is a very big question. Okay, the short answer,

541
00:29:42,840 --> 00:29:47,760
Speaker 2: unless we're going to have a society where people can't

542
00:29:48,520 --> 00:29:53,520
Speaker 2: keep the you know, the results of their efforts and earnings,

543
00:29:53,840 --> 00:29:57,040
Speaker 2: you're going to have some inequality, right, And so this

544
00:29:57,120 --> 00:30:00,840
Speaker 2: is the Agel debate of like Marxism versus cap Okay,

545
00:30:00,880 --> 00:30:02,560
Speaker 2: So let's set a fun you know, at a very

546
00:30:02,560 --> 00:30:05,800
Speaker 2: basic level, say that you need to have some inequality

547
00:30:06,280 --> 00:30:09,080
Speaker 2: to incentivize people to put in the effort to work

548
00:30:09,720 --> 00:30:12,400
Speaker 2: and to earn a lot. Now, do we have to

549
00:30:12,440 --> 00:30:15,280
Speaker 2: have so much inequality as we have in the US

550
00:30:15,600 --> 00:30:19,440
Speaker 2: to incentivize people to work. Probably not. But I am

551
00:30:19,560 --> 00:30:22,360
Speaker 2: an economist through and through, and you know, as a

552
00:30:22,440 --> 00:30:24,880
Speaker 2: labor economist, when I look at the data and look

553
00:30:24,920 --> 00:30:26,680
Speaker 2: at all of the studies that have been done on this,

554
00:30:26,840 --> 00:30:31,360
Speaker 2: it's pretty clear that when you have higher tax rates

555
00:30:31,360 --> 00:30:36,080
Speaker 2: at the top and more income transfers at the bottom,

556
00:30:36,560 --> 00:30:40,000
Speaker 2: there is a productivity loss. People will work less on

557
00:30:40,080 --> 00:30:44,120
Speaker 2: both sides. The normative question or value question or political

558
00:30:44,240 --> 00:30:47,520
Speaker 2: question becomes how much productivity gain are we willing to

559
00:30:47,520 --> 00:30:52,080
Speaker 2: give up to contribute to a more equal society. So

560
00:30:52,560 --> 00:30:57,600
Speaker 2: you're absolutely right, zero inequality should not be our goal,

561
00:30:58,320 --> 00:31:01,160
Speaker 2: just like frankly, zero police, you should should not be vehicle.

562
00:31:01,280 --> 00:31:05,040
Speaker 2: Yeah right, you take some of the negative consequences so

563
00:31:05,200 --> 00:31:10,560
Speaker 2: that there's some production in the economy. I am more concerned,

564
00:31:11,400 --> 00:31:14,320
Speaker 2: you know, with bringing up the lower part of the

565
00:31:14,360 --> 00:31:20,160
Speaker 2: distribution than I am with taking away income or wealth

566
00:31:20,200 --> 00:31:23,760
Speaker 2: from the very top. Not everybody shares that view, obviously,

567
00:31:23,840 --> 00:31:28,080
Speaker 2: some people, some prominent people, just find it morally repugnant

568
00:31:28,120 --> 00:31:31,480
Speaker 2: that some, you know, a few individuals have such a

569
00:31:31,560 --> 00:31:35,040
Speaker 2: high concentration of wealth when there are other people who

570
00:31:35,120 --> 00:31:39,480
Speaker 2: who are living in poverty. Again, I'm just more concerned

571
00:31:39,480 --> 00:31:42,200
Speaker 2: with making sure that we take care of and we

572
00:31:42,280 --> 00:31:45,840
Speaker 2: do a better job in society of meeting the material

573
00:31:45,960 --> 00:31:50,560
Speaker 2: needs of everybody than necessarily offended by high levels of

574
00:31:50,560 --> 00:31:51,640
Speaker 2: concentration at the top.

575
00:31:51,800 --> 00:31:54,360
Speaker 1: Yeah, So I initially reached out to you because I

576
00:31:54,360 --> 00:31:56,960
Speaker 1: had a listener email me. His name's John. He was like,

577
00:31:57,160 --> 00:31:59,640
Speaker 1: I would love for you to dig deeper into demographic

578
00:31:59,680 --> 00:32:03,920
Speaker 1: impact on personal finances. And he's basically saying, well, how

579
00:32:03,920 --> 00:32:08,680
Speaker 1: should people be reacting given the fact that birth rates

580
00:32:08,680 --> 00:32:12,200
Speaker 1: are declining and the economic consequences that that's going to create.

581
00:32:12,240 --> 00:32:14,600
Speaker 1: And we can already see like what's happening in a

582
00:32:14,640 --> 00:32:18,240
Speaker 1: place like South Korea or Japan, and you can kind

583
00:32:18,280 --> 00:32:22,600
Speaker 1: of like predict some of our own future and what

584
00:32:22,640 --> 00:32:25,000
Speaker 1: we're going to encounter. So what are you seeing there?

585
00:32:25,400 --> 00:32:28,880
Speaker 1: And how are we going to be impacted as individual

586
00:32:28,960 --> 00:32:31,680
Speaker 1: economic units, which obviously we're human beings, but we're also

587
00:32:32,200 --> 00:32:34,000
Speaker 1: individual economic units, Like how are we going to be

588
00:32:34,000 --> 00:32:35,720
Speaker 1: impacted by some of those trends.

589
00:32:35,800 --> 00:32:38,560
Speaker 2: Let's talk about declining birth rates, But just for the listeners,

590
00:32:38,640 --> 00:32:41,960
Speaker 2: I want to be very explicit in our segue here

591
00:32:42,400 --> 00:32:44,760
Speaker 2: to note that what we were talking about before, in

592
00:32:44,840 --> 00:32:47,800
Speaker 2: terms of the decline in marriage and the reduction and

593
00:32:47,840 --> 00:32:51,400
Speaker 2: the share of kids living in two parent households, the

594
00:32:51,480 --> 00:32:54,760
Speaker 2: share of kids living outside married parent households has happened

595
00:32:54,800 --> 00:32:58,680
Speaker 2: despite the fact that birth rates have been falling a lot, Okay,

596
00:32:58,720 --> 00:33:00,920
Speaker 2: And the reason I want to make that segue explicit

597
00:33:01,160 --> 00:33:04,680
Speaker 2: is because twenty years ago we were really worried about

598
00:33:05,040 --> 00:33:08,440
Speaker 2: the high number of teenage births in this country, and

599
00:33:08,480 --> 00:33:12,960
Speaker 2: teenage births are almost always outside marriage. What's been shocking

600
00:33:13,040 --> 00:33:16,520
Speaker 2: from the perspective of family structure is that teenage births

601
00:33:16,640 --> 00:33:21,440
Speaker 2: have plummeted, which is a good thing, and yet there

602
00:33:21,480 --> 00:33:23,960
Speaker 2: hasn't been a decrease in the share of kids living

603
00:33:23,960 --> 00:33:26,880
Speaker 2: with their moms, only because that previous trend we were

604
00:33:26,920 --> 00:33:30,440
Speaker 2: talking about is really reflective of the fact that the

605
00:33:30,520 --> 00:33:33,600
Speaker 2: decline in marriage and the sort of rise in single

606
00:33:33,640 --> 00:33:37,600
Speaker 2: mother households that sort of spread across the distribution away

607
00:33:37,600 --> 00:33:40,640
Speaker 2: from just the very disadvantage groups. Okay, so then when

608
00:33:40,640 --> 00:33:42,640
Speaker 2: we look at the birth rate, it is true that

609
00:33:44,120 --> 00:33:46,920
Speaker 2: birth rates in the US and around the world in

610
00:33:47,000 --> 00:33:51,240
Speaker 2: particular and high and middle income countries have been falling

611
00:33:51,640 --> 00:33:56,280
Speaker 2: quite steeply in recent decades, in a way that a

612
00:33:56,360 --> 00:34:00,320
Speaker 2: handful of demographers were noticing, but really, I think think

613
00:34:00,800 --> 00:34:03,760
Speaker 2: sort of just was not. It was really not widely

614
00:34:03,960 --> 00:34:08,279
Speaker 2: noticed until now. In many places like South Korea, they're

615
00:34:08,280 --> 00:34:13,160
Speaker 2: almost like an existential point of population decline.

616
00:34:12,880 --> 00:34:16,400
Speaker 1: More strollers being sold for dogs than for kids for

617
00:34:16,440 --> 00:34:16,879
Speaker 1: them for base.

618
00:34:16,960 --> 00:34:19,960
Speaker 2: That's so in the US, where are we well, in

619
00:34:20,000 --> 00:34:24,120
Speaker 2: the US our total fertility rate and let me define that.

620
00:34:24,239 --> 00:34:27,320
Speaker 2: But right now our total fertility rate is one point six.

621
00:34:28,000 --> 00:34:31,080
Speaker 2: This is the lowest it's ever been in the US.

622
00:34:31,560 --> 00:34:36,360
Speaker 2: The reason why this low level is gaining attention is

623
00:34:36,400 --> 00:34:42,000
Speaker 2: because this is substantially below the fertility rate we would

624
00:34:42,160 --> 00:34:48,080
Speaker 2: need for our population to naturally reproduce itself meeting without immigration. Okay,

625
00:34:48,120 --> 00:34:51,320
Speaker 2: So the total fertility rate, you can think of it

626
00:34:51,719 --> 00:34:56,240
Speaker 2: as an approximation of the number of children a woman

627
00:34:56,320 --> 00:34:58,640
Speaker 2: in the you know, in a particular country will have

628
00:34:58,760 --> 00:35:03,840
Speaker 2: over her lifetime based on current age profile of childbearing. Okay,

629
00:35:03,840 --> 00:35:07,160
Speaker 2: so it's not a perfect prediction of what's going to happen,

630
00:35:07,960 --> 00:35:10,360
Speaker 2: but we are on track for women on average to

631
00:35:10,400 --> 00:35:13,560
Speaker 2: have one point six children. You need people to have

632
00:35:13,600 --> 00:35:16,400
Speaker 2: about two point one children in order for the population

633
00:35:16,480 --> 00:35:19,560
Speaker 2: to naturally reproduce. So that's why this is so concerning

634
00:35:19,680 --> 00:35:25,080
Speaker 2: is because it really portends a decline in population growth

635
00:35:25,080 --> 00:35:28,719
Speaker 2: and ultimately a shrinking population, which is.

636
00:35:28,640 --> 00:35:31,719
Speaker 1: The opposite problem of what a lot of people were

637
00:35:31,840 --> 00:35:36,200
Speaker 1: predicting fifty years ago we were talking about overpopulation, and

638
00:35:36,520 --> 00:35:39,160
Speaker 1: now we're talking about not having enough kids right to

639
00:35:40,200 --> 00:35:42,520
Speaker 1: make our economy as vibrant as it's been.

640
00:35:42,880 --> 00:35:50,440
Speaker 2: The lasting intellectual legacy or narrative legacy of the population

641
00:35:50,920 --> 00:35:54,319
Speaker 2: bomb warning of IRLIC in the late nineteen sixties is

642
00:35:54,400 --> 00:35:56,759
Speaker 2: really phenomenal. It's like, I mean, I grew up too

643
00:35:56,840 --> 00:35:59,480
Speaker 2: learning about the population bomb and there's too many people,

644
00:36:00,840 --> 00:36:05,680
Speaker 2: you know, I think ex post it's accurate to say

645
00:36:06,239 --> 00:36:09,920
Speaker 2: that was never an accurate prediction because what Eric missed

646
00:36:09,960 --> 00:36:13,040
Speaker 2: in those predictions is what Mauth has missed, you know,

647
00:36:13,080 --> 00:36:16,360
Speaker 2: back in the eighteenth century, which is that people innovate,

648
00:36:16,600 --> 00:36:20,520
Speaker 2: people are really amazing. People come up with great ideas

649
00:36:20,680 --> 00:36:27,160
Speaker 2: and they make advances in agriculture and technology in medicine,

650
00:36:27,719 --> 00:36:33,160
Speaker 2: so that we have you know, growing population actually has

651
00:36:33,239 --> 00:36:37,200
Speaker 2: always been associated with an improvement in living standards, and

652
00:36:37,320 --> 00:36:41,759
Speaker 2: you know, life expectancy has increased. We've managed to come

653
00:36:41,840 --> 00:36:44,839
Speaker 2: up with ways to fight disease, We've managed to come

654
00:36:44,920 --> 00:36:48,520
Speaker 2: up with ways to organize our societies democratically so more

655
00:36:48,520 --> 00:36:52,000
Speaker 2: people benefit. So the predictions that having too many people

656
00:36:52,160 --> 00:36:55,759
Speaker 2: was going to lead to widespread suffering I think was

657
00:36:55,880 --> 00:36:58,600
Speaker 2: never accurate. But what it did do was sort of

658
00:36:58,760 --> 00:37:03,239
Speaker 2: leave this very lasting view that too many people is

659
00:37:03,320 --> 00:37:06,440
Speaker 2: bad and in decline in the birth rate would be good.

660
00:37:06,880 --> 00:37:09,279
Speaker 2: And in fact, now we're faced with the decline in

661
00:37:09,320 --> 00:37:13,280
Speaker 2: the birth rate, and the way population grows and shrinks

662
00:37:13,360 --> 00:37:17,760
Speaker 2: is exponential, and so we are on track for global

663
00:37:17,760 --> 00:37:22,759
Speaker 2: population to decline. Declining population for both the country and

664
00:37:22,800 --> 00:37:27,520
Speaker 2: for the world actually pretends a lot of economic social challenges.

665
00:37:28,880 --> 00:37:32,160
Speaker 1: Okay, talking about though, So I'm thinking of individuals. I'm

666
00:37:32,200 --> 00:37:34,960
Speaker 1: an investor, right and I'm investing in the S and

667
00:37:35,040 --> 00:37:38,640
Speaker 1: P five hundred or total stock Market Fund because man,

668
00:37:38,960 --> 00:37:41,120
Speaker 1: that's done really well in the United States over the

669
00:37:41,120 --> 00:37:45,080
Speaker 1: past one hundred plus years, investing in a diversified manner

670
00:37:45,120 --> 00:37:50,800
Speaker 1: like that. How does declining birth rates impact my investing strategy?

671
00:37:50,800 --> 00:37:54,360
Speaker 1: How's it going to impact social security and my ability

672
00:37:54,440 --> 00:37:57,240
Speaker 1: to get what's been promised to me by the government.

673
00:37:57,280 --> 00:38:00,240
Speaker 1: There are all sorts of ways that an individual could say,

674
00:38:00,680 --> 00:38:03,400
Speaker 1: they get extrapolated declining birth rate and say this doesn't

675
00:38:03,440 --> 00:38:04,480
Speaker 1: look good for my future.

676
00:38:04,800 --> 00:38:08,200
Speaker 2: No it doesn't. But let me preface this with the

677
00:38:08,239 --> 00:38:12,320
Speaker 2: necessary caveat. I am not giving financial advice, yes, okay,

678
00:38:12,560 --> 00:38:16,480
Speaker 2: but here's let's start with the almost the most narrow

679
00:38:16,760 --> 00:38:21,400
Speaker 2: and let me focus on declining US fertility as opposed

680
00:38:21,440 --> 00:38:25,160
Speaker 2: to global for a moment. So declining global immediately, what

681
00:38:25,239 --> 00:38:29,160
Speaker 2: you're going to see is impacts on sectors that are

682
00:38:29,600 --> 00:38:33,760
Speaker 2: child centric. Right, So if I were to give financial advice,

683
00:38:33,760 --> 00:38:37,719
Speaker 2: I would probably say don't invest in pampers or maybe

684
00:38:37,719 --> 00:38:40,759
Speaker 2: adult depends. Right. But like we literally are we have

685
00:38:40,800 --> 00:38:43,240
Speaker 2: fewer babies, and where are we seeing this? We're seeing

686
00:38:43,239 --> 00:38:47,279
Speaker 2: this in school enrollment, declining. College enrollment is about to

687
00:38:47,280 --> 00:38:50,399
Speaker 2: decline because in the US birth started falling and they've

688
00:38:50,400 --> 00:38:53,759
Speaker 2: continued to decline since two thousand and seven. And so

689
00:38:53,920 --> 00:38:55,960
Speaker 2: now how old you know we've had just we have

690
00:38:56,040 --> 00:39:01,360
Speaker 2: fewer kids. So industries focused on kids goods, those are shrinking.

691
00:39:02,400 --> 00:39:05,960
Speaker 2: And we see this in the education sector. The sectors

692
00:39:05,960 --> 00:39:10,839
Speaker 2: that are growing are often those associated with an aging population.

693
00:39:11,360 --> 00:39:15,480
Speaker 2: The share of our population over age sixty five has

694
00:39:15,520 --> 00:39:19,200
Speaker 2: grown from eleven percent in nineteen eighty to about eighteen

695
00:39:19,280 --> 00:39:24,480
Speaker 2: percent now, right, So you've got this inverted population pyramid

696
00:39:24,800 --> 00:39:27,680
Speaker 2: where the aging popular. You know, we have more and

697
00:39:27,760 --> 00:39:31,480
Speaker 2: more elderly and fewer and fewer children. Okay, so that

698
00:39:31,680 --> 00:39:35,560
Speaker 2: just affects certain sectors and industries and by the way

699
00:39:36,000 --> 00:39:39,400
Speaker 2: certain parts of the country differently. So in places with

700
00:39:39,440 --> 00:39:45,280
Speaker 2: low birth rates, think California, think New England, their local

701
00:39:45,320 --> 00:39:48,759
Speaker 2: economies are affected in ways that we're just going to

702
00:39:48,800 --> 00:39:52,359
Speaker 2: see shrinking tax bass, et cetera. Okay, and then there's

703
00:39:52,400 --> 00:39:55,360
Speaker 2: other parts of the country where fertility is not declined

704
00:39:55,400 --> 00:39:58,839
Speaker 2: by as much. Those are going to be more dynamic communities.

705
00:39:59,040 --> 00:40:01,440
Speaker 2: So there's regional differences here too, and.

706
00:40:01,400 --> 00:40:03,640
Speaker 1: That's going to impact even stuff like housing, right, I'm.

707
00:40:03,520 --> 00:40:05,120
Speaker 2: Thinking about totally.

708
00:40:05,160 --> 00:40:07,839
Speaker 1: In Japan, there are places where I think you can

709
00:40:07,840 --> 00:40:11,040
Speaker 1: get a house now for a song because the communities

710
00:40:11,040 --> 00:40:14,759
Speaker 1: have been decimated, and that is that going to be

711
00:40:14,760 --> 00:40:17,399
Speaker 1: the case here too. As like real estate investors, you've

712
00:40:17,400 --> 00:40:21,520
Speaker 1: got to pay much closer attention to what's happening in

713
00:40:21,560 --> 00:40:25,560
Speaker 1: regards to these sorts of trends for when you're thinking

714
00:40:25,560 --> 00:40:27,560
Speaker 1: about buying a property that you're going to own for

715
00:40:27,600 --> 00:40:28,080
Speaker 1: a long time.

716
00:40:28,480 --> 00:40:30,279
Speaker 2: Yeah, I think that's I think that's right, and we

717
00:40:30,360 --> 00:40:34,600
Speaker 2: certainly see that. And you know, the population decline is

718
00:40:34,760 --> 00:40:39,680
Speaker 2: quite un event across across counties in the country. Okay,

719
00:40:39,960 --> 00:40:43,000
Speaker 2: Then let's think about the fiscal implications of this. You

720
00:40:43,040 --> 00:40:46,400
Speaker 2: mentioned social security. This is a really huge deal I

721
00:40:46,440 --> 00:40:49,920
Speaker 2: know people have been sort of trying to raise the

722
00:40:50,000 --> 00:40:53,759
Speaker 2: alarm on the fiscal unsustainability of Social Security for a

723
00:40:53,800 --> 00:40:56,920
Speaker 2: long time, but it is upon us, and it is

724
00:40:57,080 --> 00:41:01,640
Speaker 2: worse than the official projections suggest because the official projections

725
00:41:01,680 --> 00:41:06,120
Speaker 2: of the Social Security Administration they actually for years they

726
00:41:06,120 --> 00:41:09,080
Speaker 2: were just assuming that women were going to go back

727
00:41:09,120 --> 00:41:12,279
Speaker 2: to having on average two kids per person. And when

728
00:41:12,280 --> 00:41:14,160
Speaker 2: you read the footnotes of that report as to like,

729
00:41:14,200 --> 00:41:17,120
Speaker 2: where are they getting that from, they basically said, because

730
00:41:17,440 --> 00:41:21,719
Speaker 2: us women just have historically had historically, meaning in the

731
00:41:21,760 --> 00:41:24,600
Speaker 2: past twenty years, have historically had that many kids, and

732
00:41:24,640 --> 00:41:26,440
Speaker 2: so we just sort of assume they'll go back to it.

733
00:41:26,480 --> 00:41:29,399
Speaker 1: And the reason that's important, right, is because then those

734
00:41:29,520 --> 00:41:31,880
Speaker 1: kids grow up, get jobs and they're paying into the

735
00:41:31,880 --> 00:41:35,040
Speaker 1: Social Security system. As their parents get older and need

736
00:41:35,080 --> 00:41:38,080
Speaker 1: to take social Security, you have more workers putting into

737
00:41:38,080 --> 00:41:39,680
Speaker 1: the system to kind of keep it afloat.

738
00:41:39,840 --> 00:41:43,399
Speaker 2: In the nineteen sixties, when social Security started, we had

739
00:41:43,440 --> 00:41:48,480
Speaker 2: more than four workers per beneficiary. That then fell to

740
00:41:48,560 --> 00:41:51,960
Speaker 2: about three, and now we're looking at we're coming up

741
00:41:52,000 --> 00:41:55,879
Speaker 2: on two workers per recipient. So the way, as you said,

742
00:41:55,880 --> 00:41:58,800
Speaker 2: the way social Security works is current, even though people

743
00:41:58,840 --> 00:42:01,520
Speaker 2: think of it as I contributed to the system and

744
00:42:01,560 --> 00:42:04,160
Speaker 2: then it pays me out. Really, the way it works

745
00:42:04,200 --> 00:42:07,600
Speaker 2: is current workers are taxed and that gives the revenue

746
00:42:07,600 --> 00:42:10,160
Speaker 2: that pays out current benefits. And so as you have

747
00:42:10,200 --> 00:42:13,680
Speaker 2: fewer people contributing and more people taking it, the scheme

748
00:42:13,800 --> 00:42:20,480
Speaker 2: just financially doesn't work anymore. What happens when social security

749
00:42:20,520 --> 00:42:22,920
Speaker 2: does not have enough money to pay out all the

750
00:42:22,960 --> 00:42:27,799
Speaker 2: benefits is not entirely clear. Some reading of the statute

751
00:42:27,880 --> 00:42:31,759
Speaker 2: suggests that it's just going to imply a twenty four

752
00:42:31,800 --> 00:42:38,640
Speaker 2: percent cut in everyone's benefits. So how policymakers eventually respond

753
00:42:38,719 --> 00:42:41,240
Speaker 2: to this crisis will determine what happens to the system.

754
00:42:41,280 --> 00:42:43,680
Speaker 2: But we see this in Europe, for example, because in

755
00:42:43,719 --> 00:42:49,200
Speaker 2: Europe birth rates fell below replacement level a couple decades

756
00:42:49,239 --> 00:42:51,600
Speaker 2: before they did in the US. We're actually sort of

757
00:42:51,680 --> 00:42:56,360
Speaker 2: lagging Europe in terms of these demographic challenges, and you

758
00:42:56,440 --> 00:42:59,720
Speaker 2: see that Europe is struggling with their social insurance systems

759
00:43:00,200 --> 00:43:02,960
Speaker 2: trying to figure out how to raise money. That also

760
00:43:03,960 --> 00:43:09,919
Speaker 2: heightens the conflict around immigration, because bringing in prime age

761
00:43:09,960 --> 00:43:13,000
Speaker 2: workers now is an immediate way to shore up your

762
00:43:13,040 --> 00:43:17,640
Speaker 2: workforce and your contributions to these systems. But if with

763
00:43:18,400 --> 00:43:24,359
Speaker 2: the population aging, with native birth falling, and with political

764
00:43:24,480 --> 00:43:28,600
Speaker 2: backlash to immigration, Countries like ours and those in Europe

765
00:43:29,040 --> 00:43:31,280
Speaker 2: have a real tough time dealing with these issues.

766
00:43:31,560 --> 00:43:34,800
Speaker 1: It does seem like a country like ours has a

767
00:43:34,840 --> 00:43:40,120
Speaker 1: particular ability, unlike most other nations, to allow certain types

768
00:43:40,120 --> 00:43:44,239
Speaker 1: of immigration to actually counteract some of these negative birth

769
00:43:44,320 --> 00:43:47,799
Speaker 1: rate trends. But it's something we're not taking advantage of

770
00:43:47,800 --> 00:43:50,440
Speaker 1: the fact we're going the opposite path. But we could

771
00:43:51,040 --> 00:43:53,560
Speaker 1: tell me if I'm wrong, in an economic sense, kind

772
00:43:53,600 --> 00:43:56,719
Speaker 1: of make some hay on the immigration front in order

773
00:43:56,800 --> 00:43:59,879
Speaker 1: to counterbalance some of the decline in birth rates.

774
00:44:00,920 --> 00:44:03,959
Speaker 2: I mean, that is in some sense the easiest way

775
00:44:04,040 --> 00:44:08,080
Speaker 2: to deal with this challenge in the immediate future. I

776
00:44:08,120 --> 00:44:11,680
Speaker 2: do want to note, though, immigration is only a partial

777
00:44:11,719 --> 00:44:16,680
Speaker 2: solution because birth rates are falling essentially everywhere. The fertility

778
00:44:16,760 --> 00:44:19,359
Speaker 2: rate in Mexico is actually now lower than in the US,

779
00:44:19,560 --> 00:44:21,919
Speaker 2: which surprises a lot of people. So even a lot

780
00:44:21,920 --> 00:44:27,000
Speaker 2: of these sending countries are experiencing decline in birth rates.

781
00:44:27,280 --> 00:44:31,600
Speaker 2: That just means going forward, there's likely to be a

782
00:44:31,680 --> 00:44:34,919
Speaker 2: smaller supply of potential immigrants than there is right now.

783
00:44:35,000 --> 00:44:37,000
Speaker 2: But that's a difference between the long term and now

784
00:44:37,400 --> 00:44:40,160
Speaker 2: the other thing. Okay, So we talked about like immediate

785
00:44:41,200 --> 00:44:44,279
Speaker 2: challenges to certain sectors or communities from declining birth rates.

786
00:44:44,280 --> 00:44:49,360
Speaker 2: We talked about the fiscal challenges. A shrinking population and

787
00:44:49,400 --> 00:44:54,040
Speaker 2: an aging population poses demographic headwinds, and we've seen this

788
00:44:54,120 --> 00:44:58,840
Speaker 2: in South Korea too. Now Here, I want to acknowledge destination.

789
00:44:59,320 --> 00:45:03,839
Speaker 2: Demograp doesn't have to be destiny, and we could take

790
00:45:03,920 --> 00:45:08,480
Speaker 2: efforts to counteract these trends. But let me just articulate

791
00:45:08,520 --> 00:45:14,520
Speaker 2: what the headwinds are. We have evidence again from really

792
00:45:14,640 --> 00:45:20,160
Speaker 2: nice academic studies, showing that older firms tend to be

793
00:45:20,280 --> 00:45:25,560
Speaker 2: less innovative, older workforces tend to be less dynamic. What

794
00:45:25,600 --> 00:45:27,680
Speaker 2: does that mean? It means you could think of it

795
00:45:27,719 --> 00:45:33,640
Speaker 2: as people create ideas, and so the more people is

796
00:45:33,640 --> 00:45:36,160
Speaker 2: how we get more good ideas that are non rival

797
00:45:36,280 --> 00:45:38,239
Speaker 2: So like you just needed one person to come up

798
00:45:38,280 --> 00:45:42,359
Speaker 2: with a vaccine and millions of people don't get sick. Right,

799
00:45:42,400 --> 00:45:44,840
Speaker 2: you just need one person to come up with some

800
00:45:44,960 --> 00:45:48,840
Speaker 2: fabulous managerial breakthrough, and all firms can be more productive.

801
00:45:49,440 --> 00:45:53,960
Speaker 2: But beyond that, the evidence suggests that younger workers tend

802
00:45:54,000 --> 00:45:57,719
Speaker 2: to be more dynamic, they start more businesses, and so

803
00:45:57,880 --> 00:46:01,759
Speaker 2: as you're we're facing not just a shrinking workforce, but

804
00:46:01,840 --> 00:46:07,040
Speaker 2: also an aging workforce, and that potentially means less innovation,

805
00:46:07,440 --> 00:46:10,400
Speaker 2: which is not good for living standards. So this is

806
00:46:10,440 --> 00:46:12,960
Speaker 2: the opposite of the prediction that more people is bad

807
00:46:13,000 --> 00:46:16,680
Speaker 2: for living standards. This is fewer people, and fewer young

808
00:46:16,680 --> 00:46:22,480
Speaker 2: people in particular, threatens living standards, or it threatens to

809
00:46:22,480 --> 00:46:26,880
Speaker 2: have slower rates of innovation. No, that doesn't have to

810
00:46:26,920 --> 00:46:30,960
Speaker 2: be the case. We could invest in making sure that

811
00:46:31,200 --> 00:46:34,680
Speaker 2: every person has higher human capital. We can make a

812
00:46:34,680 --> 00:46:37,960
Speaker 2: lot of educational investments, we can invest in technology, we

813
00:46:38,000 --> 00:46:41,120
Speaker 2: can figure out how to leverage AI. But we should

814
00:46:41,160 --> 00:46:44,760
Speaker 2: be clear eyed about the fact that the demographic trends

815
00:46:44,760 --> 00:46:48,440
Speaker 2: we're experiencing do pose headwinds and we should take them

816
00:46:48,480 --> 00:46:48,839
Speaker 2: head on.

817
00:46:49,840 --> 00:46:51,640
Speaker 1: Okay, got a few more questions. I want to get

818
00:46:51,680 --> 00:46:55,200
Speaker 1: to with you, Melissa, and specifically I want to talk

819
00:46:55,239 --> 00:46:59,280
Speaker 1: about you have three kids, Well, how are you these trends?

820
00:46:59,280 --> 00:47:01,640
Speaker 1: How's that impacting the advice you give them. We'll talk

821
00:47:01,680 --> 00:47:12,120
Speaker 1: about that and more right after this. Okay, we're back,

822
00:47:12,239 --> 00:47:16,400
Speaker 1: still talking about demographics in your dollars with Professor Melissa Karney.

823
00:47:17,040 --> 00:47:18,759
Speaker 1: We list say, I don't want to know what's in

824
00:47:18,760 --> 00:47:22,000
Speaker 1: your portfolio. I don't want to know exactly how you're investing.

825
00:47:22,040 --> 00:47:25,560
Speaker 1: But you have kids too, and you see these trends coming,

826
00:47:25,600 --> 00:47:27,799
Speaker 1: and you have an idea, especially when you look to

827
00:47:27,840 --> 00:47:29,879
Speaker 1: other countries that are already experiencing some of these things,

828
00:47:29,880 --> 00:47:32,400
Speaker 1: of what maybe some of the outcomes could look like.

829
00:47:32,440 --> 00:47:36,520
Speaker 1: How are you talking to your kids about the coming

830
00:47:36,680 --> 00:47:41,880
Speaker 1: economic reality of some of these these trends and maybe

831
00:47:41,880 --> 00:47:43,359
Speaker 1: how they should react to them.

832
00:47:43,760 --> 00:47:46,920
Speaker 2: I have two in college and one in high school,

833
00:47:46,920 --> 00:47:49,720
Speaker 2: So I think the thing that's most immediately on my mind,

834
00:47:49,760 --> 00:47:55,160
Speaker 2: to be honest, is they're facing very uncertain job markets

835
00:47:55,200 --> 00:47:57,120
Speaker 2: in the sense of we don't know what jobs are

836
00:47:57,160 --> 00:47:59,359
Speaker 2: going to look like in ten years. Yeah, and so

837
00:47:59,400 --> 00:48:02,640
Speaker 2: that's a different brand investment strategy. That's what kind of

838
00:48:02,719 --> 00:48:06,760
Speaker 2: skills do they invest in being mindful of the uncertainties

839
00:48:06,800 --> 00:48:10,320
Speaker 2: of where the labor market is going. But we certainly

840
00:48:10,360 --> 00:48:15,239
Speaker 2: try to teach them the value of saving and compound

841
00:48:15,280 --> 00:48:19,440
Speaker 2: interest and all that. I don't think they should at

842
00:48:19,480 --> 00:48:23,719
Speaker 2: all be sanguine about social security being around for them,

843
00:48:24,120 --> 00:48:28,120
Speaker 2: that's for sure. So I think that would be silly

844
00:48:28,239 --> 00:48:31,200
Speaker 2: to think, Okay, you're just going to work and you'll

845
00:48:32,080 --> 00:48:33,719
Speaker 2: the government will be there to take care of you

846
00:48:33,760 --> 00:48:35,799
Speaker 2: in your old age. I mean, this is another thing.

847
00:48:35,880 --> 00:48:41,000
Speaker 2: It's not even just the finances of social security. With

848
00:48:41,960 --> 00:48:46,080
Speaker 2: so many adults not having children and so many adults

849
00:48:46,080 --> 00:48:49,600
Speaker 2: not getting married, there is a very immediate question of

850
00:48:50,000 --> 00:48:52,279
Speaker 2: who is going to take care of the elderly in

851
00:48:52,320 --> 00:48:55,080
Speaker 2: this country. And this we see in Japan too.

852
00:48:55,320 --> 00:48:58,240
Speaker 1: I mean robots, right, apparently, I guess.

853
00:48:58,520 --> 00:49:00,400
Speaker 2: I mean this is like one of those how do

854
00:49:00,440 --> 00:49:02,400
Speaker 2: you say the word the raw schow test or whatever.

855
00:49:02,440 --> 00:49:04,279
Speaker 2: Some people are like robots will take care of them

856
00:49:04,280 --> 00:49:06,600
Speaker 2: and that makes them feel better. That to me is

857
00:49:06,640 --> 00:49:09,640
Speaker 2: like a terrifying dystopian image.

858
00:49:10,040 --> 00:49:12,440
Speaker 1: It doesn't sound good to me, but it does appear

859
00:49:12,440 --> 00:49:15,520
Speaker 1: to where we're headed, you know, yeah, yeah, okay, if

860
00:49:15,640 --> 00:49:17,799
Speaker 1: strengthening families kind of going back to the earliest parts

861
00:49:17,840 --> 00:49:20,440
Speaker 1: of our conversation, if that's if that's crucial to general

862
00:49:20,480 --> 00:49:23,719
Speaker 1: well being an economic progress, how should individuals who are

863
00:49:23,760 --> 00:49:27,279
Speaker 1: listening to this respond. Should people be like, I wasn't

864
00:49:27,280 --> 00:49:31,000
Speaker 1: planning on getting married, but now that I heard Melissa

865
00:49:31,040 --> 00:49:34,239
Speaker 1: talk about how important it is to our overall economic prosperity,

866
00:49:34,520 --> 00:49:37,640
Speaker 1: I'm gonna jump on. I don't even know what website

867
00:49:37,640 --> 00:49:39,640
Speaker 1: people use to meet people anymore or do they just

868
00:49:39,680 --> 00:49:42,200
Speaker 1: go to the local bar and find somebody. Yeah, what

869
00:49:42,440 --> 00:49:44,520
Speaker 1: would you tell somebody who's listening, Like, what can I

870
00:49:44,640 --> 00:49:49,880
Speaker 1: do to participate in? Uh in what's good for myself

871
00:49:49,920 --> 00:49:50,720
Speaker 1: and for our society?

872
00:49:50,920 --> 00:49:54,440
Speaker 2: Yes, this, I do get this question a lot, especially

873
00:49:54,560 --> 00:49:56,799
Speaker 2: from you know, college age kids who I spend a

874
00:49:56,800 --> 00:49:59,400
Speaker 2: lot of my time with. It always makes me uncomfortable,

875
00:49:59,440 --> 00:50:02,000
Speaker 2: isn't it con missed? But I will take the bait

876
00:50:02,080 --> 00:50:05,560
Speaker 2: with the caveat that now. My answer in part reflects

877
00:50:05,560 --> 00:50:10,360
Speaker 2: my own values. I think we have become too agnostic

878
00:50:11,600 --> 00:50:14,440
Speaker 2: about the way we talk about marriage in the sense

879
00:50:14,520 --> 00:50:20,640
Speaker 2: of especially when there's kids involved, and so, you know, again,

880
00:50:21,040 --> 00:50:23,160
Speaker 2: there are some couples that should not be together, and

881
00:50:23,160 --> 00:50:25,520
Speaker 2: it would be bad for everybody to the extent that

882
00:50:25,560 --> 00:50:29,120
Speaker 2: there are couples who were sort of indifferent about being together.

883
00:50:29,400 --> 00:50:33,080
Speaker 2: I think it would be for everybody's benefit to just

884
00:50:33,120 --> 00:50:36,879
Speaker 2: be a little bit more clear eyed about the benefits,

885
00:50:37,239 --> 00:50:42,160
Speaker 2: the documented benefits of marriage for both adult and child wellbeing,

886
00:50:42,480 --> 00:50:47,279
Speaker 2: and just have that inform people's decisions about, you know,

887
00:50:47,320 --> 00:50:49,360
Speaker 2: one of the most important decisions they will make for

888
00:50:49,440 --> 00:50:52,600
Speaker 2: themselves and their and their kids. There's also some really

889
00:50:52,640 --> 00:50:56,880
Speaker 2: interesting evidence suggesting that when there are cool off periods

890
00:50:56,920 --> 00:50:59,600
Speaker 2: for divorce. You know, this is an area that needs

891
00:50:59,600 --> 00:51:02,160
Speaker 2: more staff. But when there's cool off periods, a bunch

892
00:51:02,160 --> 00:51:05,160
Speaker 2: of people actually wind up not getting divorced. And so

893
00:51:05,280 --> 00:51:10,480
Speaker 2: that suggests too that like maybe being I don't know,

894
00:51:10,640 --> 00:51:14,319
Speaker 2: slower about that process could ultimately lead to greater both

895
00:51:14,360 --> 00:51:19,640
Speaker 2: adult and child well being. Related more to the fertility question,

896
00:51:21,400 --> 00:51:25,760
Speaker 2: I you know, I mentioned the reasons why I worry

897
00:51:25,800 --> 00:51:29,640
Speaker 2: about a declining birth rate from an economic position, one

898
00:51:29,640 --> 00:51:31,839
Speaker 2: of the things I actually worry about. If you look

899
00:51:31,880 --> 00:51:36,400
Speaker 2: in the data, many more people say they would like

900
00:51:36,520 --> 00:51:40,279
Speaker 2: to have children. People are still inclined to say a

901
00:51:40,320 --> 00:51:44,120
Speaker 2: two child family is the ideal than are actually realizing

902
00:51:44,200 --> 00:51:47,239
Speaker 2: those those levels of child bearing. So, for you know,

903
00:51:47,719 --> 00:51:49,879
Speaker 2: fifty percent of thirty year old women in the US

904
00:51:49,960 --> 00:51:52,960
Speaker 2: are now childless, but if you look at surveys, it's

905
00:51:53,040 --> 00:51:55,600
Speaker 2: nothing like fifty percent of thirty year old women say

906
00:51:55,640 --> 00:51:59,000
Speaker 2: they want to ultimately be childless. That makes me more

907
00:51:59,000 --> 00:52:03,400
Speaker 2: worried that we've created a society or a set of

908
00:52:03,440 --> 00:52:07,480
Speaker 2: expectations where people are putting off or forgoing having children

909
00:52:07,719 --> 00:52:11,400
Speaker 2: who ultimately will wish that they did have kids. And

910
00:52:11,480 --> 00:52:13,920
Speaker 2: I think that's something that we need to again be

911
00:52:14,000 --> 00:52:17,480
Speaker 2: cognizant of and be attuned to.

912
00:52:17,800 --> 00:52:21,480
Speaker 1: Yeah, okay, last question for you, given the college degree

913
00:52:21,680 --> 00:52:25,960
Speaker 1: gap that we've discussed too, is part of the problem

914
00:52:26,000 --> 00:52:28,359
Speaker 1: getting more young people to pursue a college degree because

915
00:52:28,400 --> 00:52:32,719
Speaker 1: that's something else that's become fairly or far less affordable.

916
00:52:32,880 --> 00:52:35,319
Speaker 1: And we still see the income gap overall, right over

917
00:52:35,360 --> 00:52:38,000
Speaker 1: the many decades people that graduate with a college degree

918
00:52:38,040 --> 00:52:40,680
Speaker 1: and then people that don't. But there's because of the

919
00:52:40,760 --> 00:52:45,319
Speaker 1: soaring cost of college, and it does seem like more

920
00:52:45,360 --> 00:52:48,120
Speaker 1: people are, especially gen z ers, are saying, yeah, I

921
00:52:48,160 --> 00:52:50,799
Speaker 1: don't know if that's the right move for me. I

922
00:52:50,800 --> 00:52:52,600
Speaker 1: don't want to graduate with one hundred and fifty thousand

923
00:52:52,640 --> 00:52:55,160
Speaker 1: dollars in debt and not have the job that's going

924
00:52:55,200 --> 00:52:57,360
Speaker 1: to earn me that greater lifetime income at the end

925
00:52:57,440 --> 00:53:00,719
Speaker 1: of the day. So is I don't know, it's a

926
00:53:00,719 --> 00:53:03,799
Speaker 1: complicated question, but to getting more college degrees, is that

927
00:53:04,080 --> 00:53:05,600
Speaker 1: an answer to this problem, or at least part of

928
00:53:05,600 --> 00:53:05,960
Speaker 1: the answer.

929
00:53:06,239 --> 00:53:09,440
Speaker 2: A college degree is still in general worth it, right,

930
00:53:09,520 --> 00:53:13,000
Speaker 2: We just know that a college degree confers so many

931
00:53:13,080 --> 00:53:16,560
Speaker 2: advantages in the labor market and leads to higher earnings.

932
00:53:17,560 --> 00:53:21,759
Speaker 2: A lot I mean, we have very high share of

933
00:53:21,880 --> 00:53:26,000
Speaker 2: high school graduates or going to college. It's less about

934
00:53:26,040 --> 00:53:28,880
Speaker 2: accessing college or starting college. A lot of students don't

935
00:53:28,920 --> 00:53:30,960
Speaker 2: finish college, and those are the ones you really worry

936
00:53:31,000 --> 00:53:33,359
Speaker 2: about because they take on some debt and then don't

937
00:53:33,360 --> 00:53:37,320
Speaker 2: even get the benefits of the degree. But I also

938
00:53:37,400 --> 00:53:39,920
Speaker 2: will say that, you know, as someone in the higher

939
00:53:40,040 --> 00:53:43,759
Speaker 2: education sector, I think the reckoning that's been brought upon

940
00:53:43,800 --> 00:53:48,120
Speaker 2: the higher education sector is a good thing. And given

941
00:53:48,200 --> 00:53:52,120
Speaker 2: the costs, universities and colleges need to make sure that

942
00:53:52,239 --> 00:53:56,960
Speaker 2: they are delivering a valuable product. And so while on

943
00:53:57,000 --> 00:53:59,920
Speaker 2: average a college degree is still a very good investment,

944
00:54:00,400 --> 00:54:04,640
Speaker 2: not all colleges and not all degrees yield the same benefits,

945
00:54:04,840 --> 00:54:08,719
Speaker 2: and so there's room for improvement on the sector side too,

946
00:54:09,200 --> 00:54:12,279
Speaker 2: to convince the public that a degree is valuable, but

947
00:54:12,400 --> 00:54:15,640
Speaker 2: also to make sure that every college and degree that

948
00:54:15,760 --> 00:54:18,200
Speaker 2: is charging students or charging the government on behalf of

949
00:54:18,239 --> 00:54:23,200
Speaker 2: students is actually delivering a high quality education and degree.

950
00:54:23,520 --> 00:54:25,960
Speaker 1: Melissa Karney, this has been an excellent conversation. Thank you

951
00:54:26,040 --> 00:54:27,759
Speaker 1: so much for joining me work in how to money

952
00:54:27,760 --> 00:54:29,960
Speaker 1: listeners find out more about you, what you're up to,

953
00:54:30,560 --> 00:54:32,840
Speaker 1: and your wildly successful book.

954
00:54:33,160 --> 00:54:35,360
Speaker 2: Oh thank you, So, I guess the easiest place is

955
00:54:35,400 --> 00:54:38,680
Speaker 2: my website, Melissa Karney dot com. You can also find

956
00:54:38,680 --> 00:54:41,239
Speaker 2: me on the economics department page at the University of

957
00:54:41,280 --> 00:54:41,800
Speaker 2: Notre Dame.

958
00:54:42,200 --> 00:54:45,080
Speaker 1: Awesome, thank you again, thanks for having me. All Right,

959
00:54:45,120 --> 00:54:49,000
Speaker 1: that was such a fun conversation and a unique conversation

960
00:54:49,120 --> 00:54:53,000
Speaker 1: here on how to money. Definitely a departure from the

961
00:54:53,239 --> 00:54:56,680
Speaker 1: kind of meat and potatoes personal finance content we so

962
00:54:56,800 --> 00:54:59,840
Speaker 1: often talk about. But when listener John sent me that

963
00:55:00,239 --> 00:55:04,759
Speaker 1: email basically saying, Hey, why don't you talk about demographics

964
00:55:04,760 --> 00:55:07,080
Speaker 1: and how it's going to impact our personal finances? I

965
00:55:07,120 --> 00:55:09,560
Speaker 1: was like, you know what, He's got a point, And

966
00:55:09,640 --> 00:55:12,200
Speaker 1: I remember remembered Melissa's book coming out a couple of

967
00:55:12,239 --> 00:55:13,480
Speaker 1: years ago, and I was like, I don't know that

968
00:55:13,480 --> 00:55:16,440
Speaker 1: that makes sense for a conversation on this show in particular.

969
00:55:16,800 --> 00:55:18,920
Speaker 1: And then the more I thought about John's email, I

970
00:55:18,960 --> 00:55:21,799
Speaker 1: was like, actually, she's probably the perfect person to talk to,

971
00:55:21,880 --> 00:55:24,120
Speaker 1: and I think she was. I think this was this

972
00:55:24,200 --> 00:55:27,560
Speaker 1: was a really enlightening conversation for me, just to kind

973
00:55:27,600 --> 00:55:30,680
Speaker 1: of cement home some of the trends that are happening

974
00:55:31,000 --> 00:55:34,440
Speaker 1: around the world, and specifically here in the United States

975
00:55:34,880 --> 00:55:38,080
Speaker 1: and in ways that we should be reacting to those trends.

976
00:55:38,480 --> 00:55:42,040
Speaker 1: So like, does this mean you should stop investing because

977
00:55:42,040 --> 00:55:43,919
Speaker 1: the economy is going to implode because the birth rate

978
00:55:44,000 --> 00:55:47,520
Speaker 1: is declining. No, I don't think so. I don't think

979
00:55:47,520 --> 00:55:49,080
Speaker 1: that's what she was saying, and I don't think that's

980
00:55:49,120 --> 00:55:53,480
Speaker 1: where things are heading. But even something like I don't know,

981
00:55:53,520 --> 00:55:57,440
Speaker 1: Maybe my big takeaway is something like social security factoring

982
00:55:57,480 --> 00:56:02,120
Speaker 1: it into your plans, yes than you previously were. And

983
00:56:02,160 --> 00:56:05,840
Speaker 1: we've talked about with other guests on the show, the

984
00:56:06,040 --> 00:56:09,399
Speaker 1: political will to keep Social Security as is and how

985
00:56:09,400 --> 00:56:13,080
Speaker 1: the voting public is particularly skews older, and those older

986
00:56:13,080 --> 00:56:14,680
Speaker 1: people are going to vote for people to keep their

987
00:56:14,719 --> 00:56:17,400
Speaker 1: Social Security around. But at the same time, you can't.

988
00:56:18,320 --> 00:56:20,520
Speaker 1: You have to find the money somewhere. And if there

989
00:56:20,520 --> 00:56:23,400
Speaker 1: aren't enough young people paying into the system, what's going

990
00:56:23,480 --> 00:56:27,160
Speaker 1: to happen to that system. That's a good question. And

991
00:56:27,200 --> 00:56:29,000
Speaker 1: I don't think any of us is going to experience

992
00:56:29,080 --> 00:56:32,480
Speaker 1: like zero social Security payout, because again, I do think

993
00:56:32,520 --> 00:56:35,440
Speaker 1: it's politically popular, but I will think I can't imagine

994
00:56:35,440 --> 00:56:37,840
Speaker 1: they're not being adjustments to the system at some point

995
00:56:37,920 --> 00:56:43,160
Speaker 1: moving forward, And I think this is just a. It's

996
00:56:43,200 --> 00:56:47,560
Speaker 1: also just some fascinating stuff that Melissa covered in depth

997
00:56:47,600 --> 00:56:51,520
Speaker 1: in her book. If you're into statistics and you're into

998
00:56:52,120 --> 00:56:57,520
Speaker 1: kind of the economic realities of life and family and

999
00:56:57,880 --> 00:57:01,719
Speaker 1: child bearing and rearing, and even just touching on the

1000
00:57:01,719 --> 00:57:05,680
Speaker 1: economic realities of marriage was to me super fun because

1001
00:57:05,719 --> 00:57:09,640
Speaker 1: it's stuff that Auten doesn't get discussed. So thank you

1002
00:57:09,680 --> 00:57:14,440
Speaker 1: as always for joining me in my endeavors and humoring

1003
00:57:14,480 --> 00:57:17,160
Speaker 1: me when we pivot a little bit and go in

1004
00:57:17,160 --> 00:57:21,120
Speaker 1: a different direction, and we'll put links to Melissa's work.

1005
00:57:21,200 --> 00:57:23,320
Speaker 1: She's doing a lot of great work when it comes

1006
00:57:23,360 --> 00:57:25,880
Speaker 1: to the economic realities of strengthening families right now at

1007
00:57:25,880 --> 00:57:28,320
Speaker 1: the University of Notre Dame. We'll put links to that

1008
00:57:28,440 --> 00:57:31,120
Speaker 1: into her book up on our website at how to Money.

1009
00:57:31,280 --> 00:57:33,800
Speaker 1: But until next time, best friend Out.