Joel Kotkin describes one outcome of the ongoing economic slump: people aren’t having as many children. This is bad news because much growth is driven by the young, in return young people are optimistic and start families when the economy grows. It can be either either a beneficial or painful positive feedback loop.
“A more pessimistic economic outlook” is one key reason that European birth rates have been depressed and family formation so slow, confirms Austrian demographer Wolfgang Lutz. Overall fertility has fallen to roughly 1.5, well below replacement rate and all but guaranteeing a demographic-based economic crisis a decade or two sooner. Some eastern countries like Latvia now have fertility rates approaching 1.2. Lutz believes that once birthrates fall to these levels, there is no turning back.