Au Pairs, a Simple Explanation for Fertility Decline, and My Recent Congressional Testimony
My recent work
About 20,000 au pairs enter the United States yearly to live with Americans in their homes and help with childcare. In the grand scheme, the au pair program is relatively small, with benefits that concentrate among higher- income families where the mothers are skilled and productive workers. Au pairs are a small portion of the non-teacher childcare workforce, accounting for 2-4 percent of all childcare workers, depending on how many au pairs work for a second year in the United States.
However, this hasn’t stopped the Biden administration from proposing a regulation that would greatly reduce the number of au pairs by at least 70 percent, according to my estimates.
There are a few interest groups that support killing the au pair program. The biggest is other childcare workers who don’t want to compete with au pairs and the unions who represent those workers – or hope to represent them someday. They are following in a long tradition of rent-seekers who want to reduce immigration to help themselves at the expense of the immigrants and Americans who want to contract with them.
Interestingly, many of the loudest voices in support of banning the au pair program are former au pairs who have been able to stay in the United States and who mostly work in childcare. There are a handful of tradcons who also oppose the au pair program for ideological or egalitarian reasons, such as their belief that mothers should stay at home or their desire to strike back at the elites. Still, they are marginal here as they are everywhere else.
Those who support continuing the au pair program are parents with au pairs and agencies that help American families hire au pairs and navigate the bureaucracy for a fee. The motivation for parents who hire au pairs or hope to are obvious. In my limited anecdotal experience, the agencies are staffed by former au pairs who have been able to stay in the United States legally. Their livelihoods are at stake, but they also support the au pair program for other reasons. They had great experiences, and they understand that they would have had no other way to come to the U.S. with that program and that many other Americans and au pairs would be locked out of the incredible experience if this regulation were enacted. That former au pairs are on both sides of the debate is an interesting dynamic I haven’t seen reported elsewhere.
Parents with children in daycare are another group that should support the au pair program but probably won’t speak up because its spillover pecuniary benefits are small. If the au pair program were to shrink dramatically, it would result in tens of thousands of additional children in daycare across the country. That would increase the quantity demanded for childcare of all types, including daycare, and drive up the prices for all parents.
The nationwide price effect would probably be small, and some families who hire au pairs would hire private in-home help at a much higher cost. However, both effects would raise the price for parents relying on private childcare.
Are those who support au pairs rent-seekers? Depends, but less so than it seems at first blush. They are not expending scarce resources for a government-created transfer but instead arguing to maintain the small regulatory opening that allows a few foreign-born childcare workers to enter the United States. The degree of rent-seeking depends on how different the desired outcome would be from that produced by the free market. If the government’s immigration policy were entirely concerned with keeping out criminals, national security threats, and the sick, then the number of foreign-born childcare workers in the United States would be so high that virtually every middle-class family would be able to afford in-home help. The au pair program is a narrow and heavily regulated opening in that wall of government exclusion that allows a small degree of choice for Americans and foreigners to contract.
Those who support the regulation to curtail the au pair program are seeking rents at the expense of future au pairs who would be blocked and at the expense of American families, especially highly skilled working mothers in cities.
And that brings me to the last inactivated politically powerful group that should support the au pair program: skilled American mothers who live in blue cities. This group is the most politically powerful bloc in modern American politics outside the D.C. bubble. They follow politics, have strong opinions, aren’t shy in sharing them, and are fearless in asking for policy changes – for good and ill. They have children and careers and live in expensive cities with expensive childcare. Many have au pairs, may want au pairs, or at least know people who hire au pairs. I’d expect more of them to be furiously writing emails and asking to preserve, nay, expand the au pair program and opposing the Biden administration’s regulatory attempt to undermine it.
I’ve done my part by filing regulatory comments opposing the proposed rule and writing popular pieces about preserving the system. I recently appeared on D.C.’s WTTG Fox 5 Morning show to defend the au pair program with a message geared at the thousands of families that employ au pairs in the D.C. area:
Here are two other excellent pieces on the au pair program. The first is a Wall Street Journal op-ed by Kristina Rasmussen, who expertly defends the program. The second is another Wall Street Journal piece by Michelle Hackman (one of the WSJ’s best reporters, fwiw) that uses some of my data to project the costs of the Biden administration’s proposed au pair regulation.
Related to au pairs, I wrote a piece for Quillette on a simple explanation for the fertility crisis: parents today have higher opportunity costs. As a result, having children is more expensive than it used to be. Fertility falls in every country that becomes rich. There are many explanations for this, and almost all of them have some explanatory power. Still, the higher opportunity cost of having children is rarely discussed, so I filled that gap. Many writers don’t start with Occam’s Razor, but they should. Tell me why you think it’s a wrong or insufficient explanation.
From Quillette:
Several years ago, I bumped into a conservative acquaintance in the green room at Fox News. He had just been on air, and I was about to go on to talk about my area of expertise, the latest immigration controversy. (Yes, this is a very D.C. story.) I asked him what he was working on and he said, “The fertility crisis.” I was broadly aware of concepts like the demographic transition, falling total fertility rates, and how even immigrants from high-fertility societies rapidly decrease their fertility after arrival. Well-worn books by Bryan Caplan, Jonathan List, and Julian Simon about how children and a higher population are great and why falling birth rates are bad have been with me for years, but this was the first I’d heard of a crisis.
Knowing that I worked on immigration policy, my acquaintance said that immigrants assimilate too rapidly to America’s low-fertility culture and we have to find a way to slow assimilation to boost the birth rate. I disagreed vehemently because I support cultural assimilation (which is going well, by the way), but also because he had misdiagnosed the mechanism.
They’re not assimilating to America’s low-fertility culture,” I said. “They’re assimilating to high opportunity cost in the United States, which is the reason why they’re here in the first place.” He asked what I’d do to increase fertility if that were the only outcome I cared about. After clarifying that I don’t support this policy, I said that I’d massively increase marginal tax rates on the second worker in any household to force them out of the labor market, which would lower their opportunity cost of having children. Then the producer came out and hustled me onto the set.
That conversation has stuck with me because people who worry about low fertility focus on vague cultural explanations and don’t look at the simple one staring them in the face: microeconomics. Opportunity cost is what you must give up to buy what you want in terms of other goods or services, but the concept applies to every action you take. If I go to the movie theater on a Friday at 7 p.m., I give up the opportunity to spend that time watching a Netflix movie at home. The cost of going to the movie theater is watching the Netflix movie at home, or any other activity that’s second on my list of desires. The more options I have, the potentially higher the opportunity cost I face.
Read the rest of the piece here.
Lastly, I testified yesterday in front of the House Energy and Commerce Committee, Oversight and Investigations Subcommittee for the “A Threat to Every Community: Assessing the Safety, Health, and Economic Consequences of President Biden's Border Policies” hearing. Watch the video here: