Sunday, November 12, 2017

NJ's Uneven Fall in Births Foretells Starker State Aid Inequalities, Economic Stagnation


Since the 1980s the number of births in New Jersey has been steadily falling year to year, but not steadily falling place to place.

According to state statistics, The number of births in NJ peaked in 1990, when 123,125 babies were born in the Garden State.  Despite the overall growth in our population,  in 2015, only 102,199 babies were born here, a 17% fall.

The slowdown in births since 1990 has only had momentary and tiny letups since 1990. The number of births falls more steeply during recessions than in times of growth, but it hasn't completely rebound after recessions either.



Update: 101,171 babies were born in NJ in 2018, so the decline has continued.
Without going too far into the causes, I think there are two major ones:
1.  The disproportionate departure from New Jersey of Millennials, who are the largest generation in
Millennials Are Abandoning NJ.
American history.
2.  A cultural trend toward having smaller families in general.

New Jersey's Total Fertility Rate has fallen from 2.09 in 2007 to only 1.8 today, which is the 15th lowest in the United States.

Given that populations grow and shrink exponentially, the decline in the Total Fertility Rate will have accelerating demographic consequences for NJ.  If a society's TFR is 1.8 instead of 2.0, then in two generations it will have 19% fewer children, not 10% fewer.  (81% = 1.82/2.02)  Thus, the number of births in New
Jersey should decrease further as the steadily smaller cohorts of children born in the 1990s and 2000s enter their childbearing years.

So, unless there is a massive increase in immigration, the demographic challenge will not end.

(The difference in two generations between 2.09 and 1.8 is 25%.)

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As you would expect, the decline in births has been highly uneven.  Since 1990, Sussex County's births have fallen by 49%, from 2,274 in 1990 then to 1,154 per year today.  Warren has fallen by 45%, Hunterdon by 38%, and Monmouth by 30%.


199020002015Change Since 1990Change since 2000
Ocean62776542849435.3%29.8%
Hudson98288868103905.7%17.2%
Cumberland234820261958-16.6%-3.4%
Gloucester353831782805-20.7%-11.7%
Passaic841479366982-17.0%-12.0%
Middlesex10346105909313-10.0%-12.1%
Union7,6537,7276,782-11.4%-12.2%
Bergen10,50710,8979,413-10.4%-13.6%
Mercer507746724027-20.7%-13.8%
Atlantic4,0703,4212,936-27.9%-14.2%
Camden8,8697,0286,020-32.1%-14.3%
Essex144691215610294-28.9%-15.3%
Cape May1,3731,043881-35.8%-15.5%
Burlington5,9495,1864,353-26.8%-16.1%
Salem899811649-27.8%-20.0%
Somerset403144253297-18.2%-25.5%
Morris588264384717-19.8%-26.7%
Monmouth837980515849-30.2%-27.4%
Sussex227417781154-49.3%-35.1%
Hunterdon14871441916-38.4%-36.4%
Warren14491328792-45.3%-40.4%

The only two counties that have had growth in births are Ocean County and Hudson County, both of which are demographically and educationally unusual.

If Lakewood were excluded from the Ocean County count, Ocean County's number of births would have declined by 12% (there were 4,598 births to non-Lakewood Ocean County women in 2000 but only 4,030 in 2015)

If you know anything about Lakewood, you know that most of the children born to Lakewood-resident mothers will not go to public school.  The increase in the non-public student population will create strain on the Lakewood Public Schools for transportation and Out-of-District tuition, although the strain would not be as much as it would be if those students were enrolled in public schools.

Hudson County's family size is average, but it has a disproportionately large population of people of child-bearing age.  What I see as educationally unusual about Hudson County is that many of the parents there move out before their kids enter public school.

For instance, there have been over 1,000 babies born to women resident in Hoboken for the last five years, but the first grade cohort in Hoboken (charter and public), has about 350 kids.  Likewise for Jersey City - although not as extreme - there 4,300-4,400 babies are born per year, but the first grade cohort there has about 3,000 kids.

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Implications for Public Schools

Due to the fall in the number of births, New Jersey's student population actually peaked in 2005-06 at 1,393,782.  It has fallen now to 1,373,267.

That decline is only 1.6% and may not sound like a lot, but it occurred despite a lower drop-out rate, closings of Catholic schools, and some PreK expansion.  (source, NJ Enrollment Files)

The chart below shows the percentage change in births from 2000 to 2015.


There are many implications of the decline of births for New Jersey's public education system, state aid distribution, and the economy.

1.  The State Aid Distribution Will Become Even More Uneven

As the populations of rural districts fall, their formula aid will decline even more and be replaced by Adjustment Aid.  This enrollment decline will continue to push up the state's total of excess aid, even as the deficit grows for underaided districts.

SFRA, as it was written in 2008, does allow a district to lose state aid if its post-2008 enrollment loss exceeds 5%.  It is likely that more districts will encounter the enrollment loss threshold that allows some aid loss under SFRA's status quo.

Since the state has severe budgetary problems, the huge excess aid totals of permanently shrinking districts will be harder to justify when scores of other districts are severely underaided.

The distribution of PreK aid will also need to be redistribution.

Some districts will need more PreK money, like Hoboken and Jersey City.

 In 2015 there were 1,124 babies born to Hoboken mothers, up from 729 in 2005.  In 2015  there were 4,495 babies born to Jersey City mothers, up from 3,733 in 2005.)

On the other hand, other Abbotts have had a decline in births.  In 2015 Union City mothers only had 954 babies, compared to 1,119 in 2005.  In 2015 Pleasantville moms only had 303 babies, compared to 363 in 2005.

2.  Shrinking Areas Will Continue to Shrink

Consolidating New Jersey's rural counties into superdistricts won't just be a "could do" or "should do," but a "must do."  Cape May, Salem, Hunterdon, Warren already have fewer than 1,000 babies born per year, and Sussex is just 1,154 per year.

These five counties are New Jersey's smallest.
  • Sussex's total enrollment is 20,512.00
  • Salem's total enrollment is 10,906.50.
  • Hunterdon's total enrollment is 19,474.50.
  • Cape May's total enrollment is 12,583.00.
  • Warren's total enrollment is 16,443.50.
    And there's more contraction ahead for all of them.

    As districts shrink, many will find it difficult to sustain the classes and extracurriculars that most parents think their kids should have.

    As shrinking districts shrink further, their per student costs will become even higher.  If these districts actually lose Adjustment Aid, their taxpayers may not be able to make up the difference, since a district's fall in costs is not proportional to the fall in enrollment.

    (see "Sussex County Consolidation.")

    3.  The State's Economy will Face a Demographic Headwind

    Population growth isn't, by itself, a good thing, but it is something that an economy usually needs to grow and is, itself, a sign of economic growth.

    New Jersey already has the country's worst net outmigration rate and has 80,000 more people leave the state than it has new arrivals from other states.

    As New Jersey has smaller cohorts enter the labor force (and so many young New Jerseyans leave
    Source, http://bit.ly/2ib9Zmb.  NCES.
    anyway) employers may struggle to find enough workers.  Many employers who contemplate a New Jersey expansion or investment will decide against it, given concerns about the labor supply.

    The shrinking population will also harm the economy on the consumer-side, since there will be less aggregate demand, ie, less spending, less household formation etc.  Less aggregate demand equals less sales tax, less corporate tax etc for the Treasury.

    New Jersey's unemployment rate should stay low, which is a plus.  Housing prices will be lower than they would otherwise be, which is another plus.  Perhaps an equilibrium will be established by our net outmigration decreasing.

    But the state economy will grow very slowly and New Jersey will struggle mightily against its debts until there is a federal rescue or another round of pension cuts.

    37% of New Jersey college students already go to college out-of-state.  When the students look back home towards New Jersey in its death throes, it'll be hard to think of a reason to come back.

    After more NJ-born college students don't come back, the demographic headwind will become a hurricane.

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    State Aid Deficits and Surpluses are Dynamic


    The fact that NJ's population continues to grow in some places and shrink in others underscores how dynamic the state aid distribution is.  

    Given the continued decline of births in NJ - and outright collapse in some places - the districts in NJ that have lost enrollment over the last few years have not seen the end of it.

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