California Facing Drought of Children

Too Few Youths To Replace Retiring Adults

Jan. 16, 2013 -- California's latest drought? Children. The state, according to a new report, is producing too few children to supply the workers and taxpayers it will need tomorrow. This deficit, coupled with California's fast-growing crop of aging retirees, bodes ill for the state's economic future.

California thus faces a more immediate, more extreme version of the problem confronting the U.S. at large--the so-called "demographic cliff." How California deals with it may influence policy makers in Washington.

The report, "California's Diminishing Resource: Children," was prepared for the Lucile Packard Foundation by the Price School of Public Policy at USC.

After decades of being awash with kids, the state now faces a "protracted decline in children under the age of 10," according to the report. California lost more than 187,000 (3.6 percent) of its kids between 2000 and 2010, and it will sustain a further loss of almost 102,000 (2 percent) in the present decade.

Other states facing deficits similar or worse, according to the Wall Street Journal, include New York, Michigan, New Hampshire, Vermont and Washington. D.C.

California's problem, however, is in some ways unique. For decades, says the report, California was nourished by infusions of children brought by parents immigrating from other states or from abroad. That's no longer true. Now about 90 percent of its children are native-born. "California," says the report, "is in the midst of a homegrown revolution, in which the majority of future young adults will have been born, educated, and raised in this state."

That may spell trouble, predicts the report, because the state's quality of childhood education has been in decline, and the poverty rate for the state's children is twice that for its adults: A lack of access by young Californians to adequate food, housing, health care and education may hinder their development and restrict their potential.

The author of the report, Dowell Myers of USC Price, tells ABC News that California's dearth of children could produce unexpected consequences. These could include further reductions in state pensions (there won't be enough future tax payers to support future benefits) or a slump in real estate prices: When the moment comes for older homeowners to sell, there may not be enough younger buyers to buy, depressing prices.

What can California do to forestall these and other problems?

Not a whole heck of a lot, the study concludes, limiting its attention to children already in the state.

The best California can do is to make life better for its home-grown youngsters by seeing that they get the very best in education, health-care and job training: "Every child must have the necessary support and opportunities to become a maximally contributing member of society," according to the report.

ABC News asked Myers if there weren't perhaps other options: a state tax-credit, say, for couples having children, or regulatory changes that would make moving to California more attractive for a young couple deciding where to raise a family.

Myers allows that such policies might help. Texas, he says, has done a bang-up job attracting young adults, with the result that Texas has posted an increase of 578,000 kids during the same time California has lost 180,000. That's partly the result, he acknowledges, of Texas' creating a more favorable business climate and, in some places, providing better schools.

Experience shows, he says, that school quality is the number one thing that young parents consider when deciding where to put down roots.

California's teacher pay is low. And on a percentage GDP basis, he says, California is not spending as much on education as are other states. The state's voters could choose to change that.

As for a child tax credit, Myers says experience shows tax credits and other direct incentives are largely ineffective at raising fertility rates.

On the other hand, he says, providing better working conditions for women does prove effective. "That matters," he says. "Show more respect for moms!"