A briefing paper prepared by Daniel L. Carlson, Vivekananda Das, and Cole Grevelink for the Council on Contemporary Families symposium Policies Affecting Families: What We Know, and What to Expect in the Second Trump Term
Vice President JD Vance has been defined in the American political ethos by his positions on fertility and parenthood. Indeed, one of the more incendiary moments of the 2024 Presidential campaign occurred when a 2021 interview was unearthed where Vance commented that America was being run by “a bunch of childless cat ladies who are miserable at their own lives and the choices that they’ve made, and so they want to make the rest of the country miserable, too.” Vance’s views on reproduction are deeply tied to his views on the future of the country, once even saying those with biological children are “the people who have a more direct stake in the future of this country.” While the headlines have focused on his more abrasive comments, in his first address as Vice President, he said “It is the task of our government to make it easier for young moms and dads to afford to have kids… .”
As demonstrated in their party platform, Republicans’ top priorities clearly center on issues like immigration, diversity, equity, and inclusion, or DEI, and tariffs. Yet, Vice President Vance’s comments highlight growing concern among some American political conservatives about declining fertility. Indeed, the Republican platform mentions only one specific family policy – the Child Tax Credit (CTC) – which is designed to support families and encourage childbearing. Immediately upon the swearing in of the 119th Congress, Rep. Blake Moore (R-Utah) introduced the Family First Act (FFA) to increase the CTC to as much as $4200, while also extending benefits to pregnant mothers. In this brief, we assess who will benefit most from changes to the CTC and whether it can effectively support families and halt falling fertility.
The Reasons for Fertility Decline
Though concern about low fertility is well-founded, placing blame on the choices of childless women is not. The U.S. fertility rate has fallen steadily for the past decade and a half, from 2.12 children per woman in 2007 to a historic low of 1.66 children per woman in 2022. In 2023, nearly half of childless adults aged 18-49 said they were unlikely to ever have children, a 27 percent increase from just 5 years prior.
For a society’s population to remain stable, births and immigration must equal deaths and emigration. If net migration is zero (meaning the number of people moving into the country is equal to the number of people moving out), the fertility rate must equal 2.1 children per woman for the population to remain stable. When fertility rates fall below 2.1 (which has been called “sub-replacement fertility”), populations begin to shrink. As populations shrink, they also age (i.e., the number of aged persons exceeds the number of young persons), which threatens social stability, economic vitality, and capacity to care for older citizens as demand for laborers and caregivers begins to exceed supply. For decades, immigration and high migrant fertility buoyed the U.S. population. Yet, fertility has decreased even as immigration has increased. Still, efforts by the current administration to restrict immigration from high-fertility Latin American countries are likely to only accelerate population decline.
Developing policies that bolster fertility rates requires a firm understanding of why people are eschewing children. What Vice President Vance misses in his opinion on childless cat ladies is that while some childless adults may be unhappy because they didn’t achieve their parenthood ambitions, in the U.S., parents are generally less happy than nonparents. And looking at the lives of American parents, it’s easy to see why.
Two of the most common specific reasons for remaining childless are the unaffordability of children and the fear that parenthood will conflict with other pursuits (e.g., paid work and leisure). These are valid concerns. Over the past several decades, stagnant wages coupled with rising housing, food, and childcare costs have made it increasingly difficult to support a family. In 2015, the USDA calculated that a middle-income, married couple could expect to spend $233,610 raising a child (in 2015 dollars) through age 17 (excluding the cost of college), with the largest proportion of expenditures devoted to housing (26%), food (18%), and childcare (16%). Factoring in recent inflation, that figure now stands at over $315,000, an average of more than $18,000 a year.
In addition to shifting beliefs about gendered family roles, these financial challenges are a major reason for the decline of married male breadwinner-female homemaker couples in the U.S. and the rise of dual-earner couples, which now constitute 23% and 70% of married U.S. couples, respectively. Though having two earners can help alleviate financial pressures on families, it can also lead to additional childcare costs and considerable conflicts between work and family obligations, especially for mothers who remain conventionally responsible for housework and childcare. Indeed, estimates show that upwards of 90% of working fathers and 95% of working mothers report work-family conflicts. These conflicts are, in turn, associated with high levels of stress.
Fertility and Family Policy
Given the conditions at the heart of declining fertility, governments can encourage childbearing by establishing policies that reduce the cost and/or time burdens of raising children. To reduce costs, governments can directly subsidize families through cash assistance programs or indirectly through tax credits and deductions. Few direct subsidies exist for U.S. families, and those that do are only available to low-income families. This includes cash assistance from Temporary Aid for Needy Families (TANF) and childcare vouchers from the Child Care Development Fund (CCDF). Indirect subsidies, in contrast, are typically available to a wider range of families and include the CTC and the Child and Dependent Care Tax Credit (CDCTC) – a nonrefundable tax credit that enables single heads of household and dual-earner families to write off as much as $2,100 in childcare expenditures. Another indirect subsidy is the Earned Income Tax Credit (EITC), but this, too, is only available to low-income families. Family subsidies aside, governments can also help reduce the cost of raising children by providing services like government-operated childcare. Again, in the U.S., this is only available to low-income families (e.g., Head Start).
To reduce time burdens, governments can institute policies to protect parents’ time for caregiving. A primary means to accomplish this is to provide universal, protected paid leave for reasons including childbirth (i.e., maternity and paternity leave), childcare (i.e., parental leave), or family illness (i.e., sick leave). In the U.S., the Family and Medical Leave Act of 1993 only provides protected unpaid leave for family illness and childbirth for ~60% of workers. In addition to paid leave, government policies that enshrine job flexibility and schedule control can also reduce time burdens and role conflict. This includes extending benefits to part-time workers, establishing the right to part-time work, banning mandatory overtime, aligning public school schedules with work schedules, and reducing the 5-day, 40-hr work week to make work schedules more conducive to family care responsibilities. Currently, there are no federal policies in the U.S. that protect working parents’ time.
The Child Tax Credit (CTC)
Initially created by the Taxpayer Relief Act of 1997, the Child Tax Credit (CTC) has come to enjoy wide bipartisan support. The credit was initially $500 per child annually and non-refundable. In 2001, the Bush administration temporarily raised the CTC to $1,000 annually under the Economic Growth and Tax Relief Reconciliation Act and made it fully refundable for low-income families. This change was made permanent in 2012 by the American Taxpayer Relief Act. As part of the Tax Cuts and Jobs Act of 2017, President Trump and the Republican Party increased the CTC from $1,000 to $2,000 per child. In 2021, the value of the CTC was raised yet again to $3,600 for children under age 6 and $3,000 for children aged 6-17, this time by Democrats, as part of the American Rescue Plan Act (ARPA). In addition, the ARPA eliminated income requirements to receive the CTC, made the CTC fully refundable for all families, and made families eligible for advance monthly payments. Evidence shows that raising the CTC during the COVID-19 pandemic reduced child poverty by 40% and reduced food insecurity for millions of low-income families. These changes, nonetheless, expired in 2022.
As it stands, the future of the CTC is uncertain. The current value of the CTC set by the 2017 Tax Cut and Jobs Act is scheduled to expire at the end of 2025. If nothing is done, the CTC will be reduced by half to $1,000 per child, leaving families in an even more precarious position than they are already. Although the Family First Act (FFA) proposes a substantial increase in the CTC, a closer examination of the policy indicates that family support will continue to lag far behind family needs.
The Family First Act and the CTC
If passed, the FFA would increase the fully refundable amount of the CTC to $4,200 annually for children under age 6 and $3,000 annually for children aged 6-17. It would also provide a credit of $2,800 to pregnant mothers. The increased value of the CTC, however, would be offset by eliminating the CDCTC, reducing the maximum amount of the EITC, and providing low-income parents the same EITC amount regardless of family size. The policy, therefore, reflects not only Republican political beliefs about self-sufficiency (providing support to working families) and small government (an increase in CTC is offset so as to not increase the federal budget) but also beliefs about preferred family arrangements, as the FFA eliminates tax benefits that favor dual-earner families.
As shown in Figure 1, our preliminary analysis of the FFA shows that all families considered would experience a net increase in overall tax credits, though the impact varies across income levels, marital status, and use of paid childcare. Consistent with a focus on increasing fertility, families with more children would receive higher total credits within any income bracket. Although the FFA would increase support for all families, higher-income families (AGI of $75k+) who do not utilize paid childcare would receive the greatest absolute increase in tax subsidies, largely because two-parent, single-earner families were previously excluded from the CDCTC. Moreover, among families with lower incomes, tax subsidies would increase more for married parents compared to single parents. Nevertheless, compared to higher-income families, lower-income families would experience a more substantial increase in benefits relative to their income. For example, a family with an adjusted gross income (AGI) of $15,000 with one child would receive approximately $1,300 more in refundable credits (about 9% of their annual income), while a one-child family with an AGI of $75,000 would see an increase of about $2,200 (about 3% of their income).
Evaluation of the FFA
Despite broad increases in family support, raising the CTC is unlikely to be a panacea for struggling U.S. families or falling fertility. Our preliminary analysis suggests that while the FFA would make raising a child marginally more affordable, the impact on the typical family is not substantial. As shown in Figure 2, the affordability of raising two preschool-aged children for a median-income household across states will likely increase by only 5 to 10 percentage points (relative to current policy). Affordability would improve most in places with lower costs of raising children, such as Mississippi and Alabama. Yet, even in the most affordable states, our analysis (not shown) indicates that family support under the FFA would cover only one-quarter of the cost of raising a young family. It is unclear how much support U.S. adults need to start having more children, but an overall increase of 5 to 10 percentage points in child affordability is unlikely to motivate people to have more children.
While tax credits provide families with financial support and the flexibility to allocate resources based on their needs, relying solely on family tax credits does not address challenges related to the availability of childcare in the U.S., where many parents struggle to find adequate options. It also does not directly address the work-family conflicts faced by working parents, particularly mothers. While increasing the CTC may help alleviate some financial and time burdens, its effect on fertility rates is uncertain. The extent to which the policy may influence family arrangements is also unclear, as the value of the CTC is unlikely to offset the lost income families would experience if one parent were to leave the workforce to become a full-time caregiver to their children.
Conclusion
Fertility decline has serious consequences for societies. While many countries have faced sub-replacement fertility for decades, the U.S. has only recently begun to confront this issue.
Republicans, who position themselves as a pronatalist party, are addressing this issue by increasing the overall subsidy for households with children. On one hand, expanding the CTC, even with cuts to other tax credits, would be a net gain for families. On the other hand, the proposed subsidy would continue to fall far short of the costs of raising children in the U.S. and thus is unlikely to move the needle much on fertility. It is also worth noting that far more robust investments in pro-fertility policy have failed to achieve meaningful results. The South Korean government has invested $270 billion USD since 2008 in policies intended to raise fertility. This has included cash assistance to parents, exemption from mandatory military service, and even dating events paid for by the government. Despite this large government intervention, birth rates in South Korea have still declined by 25% over the last 16 years.
While the FFA would provide a small boost in financial support for families, it does not address the broader structural factors that shape decisions around parenthood. These factors include job stability, economic security, workplace policies and other economic and cultural issues. As a result, the policy may not achieve its intended goals of increasing fertility or effectively addressing the challenges faced by families with children. Ultimately, relying solely on tax policy is unlikely to produce substantial or lasting changes in fertility trends or the broader factors influencing family decisions.
About the Authors
Daniel L. Carlson is Associate Professor of Family and Consumer Studies at the University of Utah and member of the board of directors for the Council of Contemporary Families. His research focuses on couples’ divisions of labor and the role of work-family policy in shaping parents’ time use and well-being. He can be reached at Daniel.Carlson@fcs.utah.edu.
Vivekananda Das is an Assistant Professor of Family and Consumer Studies at the University of Utah. His research examines how public policies and other structural factors shape behavior, as well as perceptions of hardship and well-being.
Cole Grevelink is an Economics major at the University of Utah interested in policies that impacts American workers and families
