Declining Birthrates Are Bad for the Toy Industry. What can be done?

The 20th century brought the world more than two World Wars and a man on the Moon. It also brought a major shift in the world’s birth rates. Where once we worried about a Malthusian world in which too many people fought for too little food, we now agitate about a future with insufficient people to keep the world going.

Virtually every country in the developed world will soon not be producing a sufficient number of children to replace the people who leave us due to their mortality.

Those of us in the toy industry have another worry. Fewer children mean fewer customers for our toys.

How did we get to a point where the world is not producing enough children. Well, it starts with free labor, the social safety net, and birth control pills.

Free labor: The United States used to be an agricultural country. In fact, we can name the date when the majority of Americans shifted from living in the country to living in a city – 1920.

So, before 1920, if you lived on a farm, it made sense to have children because they provided free labor in a labor-intensive business. If you lived in the city, however, you worked for someone. Having children became an economic loss. Therefore, having children ceased to be an economic advantage.

Social Safety Net: If you lived before 1935, you depended on your children to provide you with food to eat and a place to live when you were too old to work. Having children was a prudent way to ensure you would not experience poverty in your old age.

All that changed in 1935 when Congress passed the Social Security Act. That Social Security check gave you the means to self-support in your senior years. You no longer needed to live with your children.

Birth Control: The first birth control pill was created in 1950, but it wasn’t until 1965 that it became ubiquitous. For the first time in history, women had control over their fertility. As women were able to limit or postpone family formation, many of them chose to pursue careers. For a woman seeking employment, having a baby was an additional expense and a handicap.

Below is a graph of the Total Fertility Rate of the world. As you can see, the Total Futility Rate is roughly 50% of where it was in 1950. Less than 2.3 means we are not replacing those we lose. We are getting very close to that number.