I decided to take a slightly different look at labor market issues in North Dakota this week. My interest in demography makes looking at fertility a bit of a natural starting point. Think of it this way, a persistent lower fertility rate points to a need to constantly bring in new people through migration to keep your labor supply constant. Fertility is, of course, a lousy policy variable to influence in an effort to change your available labor supply, unless you can afford to wait 16 years or so for impacts on your variables.
Fertility is a somewhat complicated dynamic relationship influenced by available eligible males and available eligible females. Then there are fertility expectations by participants, income, expected income, and many other factors that can matter. The single biggest constraint is women in child bearing ages. As we can see from the graph below, after a period of rapid decline, the increase in women aged 15-44 stalled.
Births are of course the other variable of interest here. The number of births is enormously important, especially when it comes to factors like allocation of healthcare spending, school expenditures, and many other fiscal variables of interest. Births experienced a sizable increase from 2010 to 2014. Like the number of women the births also stalled and then declined with the pace of decline accelerating over the last couple of years.
With these two numbers taking similar, but slightly different paths calculating the general fertility rate is important. This gives us some sense of scale and it allows comparison across areas. The fertility rate shows a really noticeable decline over the last several years.
This raises a question about the distribution of the fertility rate across the state. The use of the fertility rate controls for the differences in population size and particularly different numbers of women aged 14-44 in the different counties. We see the GFRs in the eastern third of the state are, by-and-large, lower. In the meantime, the GFRs in the west are higher.
The distribution of the GFRs conforms to the general impression of economic and demographic changes in North Dakota over the last decade. The rise of the oil economy in the west generated an influx of young workers, largely male, to work in the oil fields. After this followed more women, family formation, and eventually children.
Labor Market Implications
So there are several considerations here. The reduction in fertility conforms to the general trend seen in the country overall. While it has little bearing on the implications for labor shortages currently it suggests there may be issues persisting over the decades unless significant in-migration sources reveal themselves.
An as-yet unconsidered issue seems to be the composition of the labor market with fewer children being born. This would seem to imply more women possible in the labor force. However, the age of the women, the reproduction rate, and other issues come to mind, with no real clear answers in the offing.
The higher population areas in the state, for the most part, have lower GFRs, making it clear ND cannot rely on natural increase to grow the population of the state. Of course, there is a need to narrow the analysis to see the number of children born to women on average over their reproductive years. This matters for a significant amount of planning for schools, hospitals, and many other businesses.