Soldiers returned home young, dumb, and full of patriotic spirit.

And especially here in America, this family-centered growth coincided with what many believed to be the golden age of capitalism.

Homes were cheap, the free market was providing new-fangled products to consume, jobs could provide a stable and comfortable living, and the only thing left to do was get busy starting a family.

Now, this sounds like such a rose-tinted version of history that borders on being inaccurate, but that doesn't actually matter.

Today, we are dealing with expensive homes, over-consumption of disposable consumer junk, and jobs that are extremely insecure.

So naturally, the most pressing question for governments around the world is, how to make people make babies again?

Child care is now more expensive than rent for working families and is costing the economy more than $122 billion a year.

Their child care expenses from their income taxes, that's a first.

What is the biggest thing that needs to change here in South Korea to make this more appealing for women?

Starting next year, South Korea will pay a child care allowance of around US$530 to parents with newborns.

The biggest issue in 20 years will be population collapse, not explosion, collapse.

An uncontrolled population decline is a very concerning issue that will have serious impacts on all of us who are planning to live for more than the next 20 years.

But it's important to distinguish between people who are concerned about what a population decline represents and people who are concerned about not having a ready stream of available labor produced for them.

They may sound similar, but there are two very distinct solutions depending on how you look at the problem or if you even consider it a problem at all.

To see why, we need to clear up some history.

The exact cause of the 1950s baby boom was not as simple as people just returning home from war and getting to it.

The easiest way to see this is that there was no baby boom after the first world war.

In fact, after 1918 and a brief dip during the Spanish flu, birth rates dropped to levels very similar to today, which kind of goes against the narrative.

If you've paid any attention to general media coverage of population collapse, you have probably been told that this is an entirely modern phenomenon caused by, well, whatever problem with the modern world you want to pick, but that's not entirely accurate.

In fact, the fertility rate back here was actually worse than it looks.

To understand why, you need to understand two numbers.

The fertility rate, normally expressed in the number of births per woman, and also the replacement rate.

The replacement rate is how many children the average woman needs to have to maintain the population.

Today in America, and most other high-income countries, that number is about 2.1 children per woman.

The 2 is because the population is naturally split 50-50 between men and women.

So to account for that, the average woman needs to have two children.

And the .1 is because tragically, some children don't make it to adulthood where they could potentially have children of their own.

Now, everybody from politicians across the political spectrum to your weird uncle at Thanksgiving has been paying strangely close attention to national and global fertility rates.

But what gets less attention is that the replacement rate is variable too.

And it has also been declining.

Back in the 1920s, people needed to have more than 3 children on average just to maintain the population, since infant mortality rate was much higher than it is today.

That means that the population back here was actually declining faster than it is today.

All in the age before modern contraceptives, widespread women in the workforce, the breakdown of family values, or whatever else is blamed for our current population trends.

The other explanation for the baby boom was that the post-WWII economy was just so good that starting a family was easy.

But the Roaring 20s were also a highly prosperous post-war economy, and yet people were having a lot fewer babies.

The birth rate actually only started recovering after 1929 when the Great Depression plunged a staggering amount of American families back into relative poverty.

In fact, by actually looking at the data, you can see that the baby boom really started in the 1930s when the American economy was arguably in its worst state in the last century.

There was a pause during the war, but the post-war baby boom that we are all familiar with was really just the continuation of a trend that had already started.

So if it wasn't contraceptives, women in the workforce, economic growth, the move into cities, or modern family values, what actually caused the birth rate slump back then?

Well, it's the same thing that caused the baby boom, and the reason I am giving you this history lesson is because it could also solve a lot of our population problems today, but you might not like the answer.

One of the most consistent baby blockers is income inequality.

The economist Thomas Piketty, as part of writing his book Capital in the 21st Century, collected and compiled income inequality data over the last century.

Just quickly, this is probably one of the best books on economics ever written, and it reads easily even to non-economists.

So like always, I will leave a link to it in the description below.

Using my link helps the channel a little bit, and a good book will provide way more value than I ever could through something like a Patreon.

But anyways, if you invert the data that Piketty collected on income inequality, it lines up almost perfectly with the fertility rate.

If people feel like they aren't falling behind, if they have social mobility, and they can provide what is considered a good life, they will have more children.

The New Deal that was the foundation of the Great Depression recovery efforts and the GI Bill following World War II massively reduced income inequality, and with it, the babies flowed.

But this is a big problem because, yes, people in power want to avoid a population crunch, but not like that.

So it's time to learn how money works to find out how to make people make babies without, you know, giving them too much.

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For most of human history, our population has been pretty much stagnant.

Based on archaeological records, the average population growth rate for the 10,000 years between the dawn of human civilization and the Industrial Revolution was just 0.04%.

Generation to generation, it was barely enough to register.

And even then, there were significant setbacks like the Black Plague, which wiped out between a quarter and half of all people in Europe.

People had a lot more children on average, but fewer of them survived, so the population didn't really budge.

And then came the Industrial Revolution, which kicked off a bit of a feedback loop.

Mechanized industry and agriculture could feed and provide more people.

And more people meant more work could be done, and more innovations could be made to feed and provide for more people.

Refinements in medicine and nutrition meant that people also lived a lot longer, which gave them more opportunities to apply their expertise to making an overall wealthier world.

By best estimates, something like 7% of all of the humans to have ever lived are currently alive right now.

And that's been great for business.

Having more people naturally boosted industry, because there were more potential consumers to cater to, and population growth provided a ready supply of labor to work in the new factories.

Early industrial centers like London became extremely rich, but even back then, some familiar trends emerged.

Cities during the Industrial Revolution were horrible places to live.

They figured out building factories much faster than building sanitation.

So infectious diseases, malnutrition, and food-borne pathogens were more prevalent in these population-dense centers.

So many people died in London that up until the 20th century, it was almost entirely reliant on people moving from the countryside to get work to maintain its population.

Now most cities in high-income countries, with the notable exception of San Francisco, eventually figured out that leaving human waste in the street was not a good idea.

So even though cities aren't actively killing their inhabitants anymore, they are still population black holes that have very low birth rates and rely on people moving to them to maintain themselves.

That's simply because cities are expensive.

Unless you are extremely wealthy, you probably can't afford a family-sized home close to a major city.

And depending on your career, you might not be able to move away from those cities without losing your job.

Today, a trend has emerged where having lots of children is either an indication of being extremely wealthy or being extremely poor, with very little room in the middle for large middle-class families, because that's just become unaffordable in most cities around the world.

Now over the past 300 years, we have also run out of people to pull from the high birth rate countryside.

So the trend has gone global, and today, most advanced economies pull in people from high birth rate countries.

The rise in immigration to fill labor shortages has masked the issue, but it has caused other problems like further contributing to housing affordability and putting downward pressure on wages and upward pressure on income inequality.

There is also the not-so-subtle reality that a lot of the people that want a stable supply of young workers would, let's just say, strongly prefer if those workers were homegrown.

Now in all of this, there is one other simple solution.

Let people work jobs outside of the city.

The COVID pandemic was the most recent global event to shake up birth rates.

Initially, it caused a sharp dip as people lost their jobs and saw hospitals barely having the capacity to manage the load.

But as more dual-income households moved to working from home, births increased and not only made up for the initial drop but exceeded expected trends.

Unsurprisingly, it's easier to deal with a pregnancy and have children when parents don't need to go into an office.

It allows people to live in cheaper and more family-friendly communities further away from centers.

Now, this reality is rustling some jimmies because companies want people to move back into the office for a variety of reasons, but the good news is that we actually have some power over this.

Even with extreme measures, it's very hard to force people to have children.

So if businesses won't entertain policies to promote equality or let people work from home, they don't get their future workers and consumers.

If you want further evidence of the benefits of moving away from the office, look no further than the CEOs themselves that are demanding that workers return to the office while they don't actually show up to work at all.

Go and watch this video on how they are making that work for them because it's something more relevant today than when the video was made last year.

And don't forget to like and subscribe to keep on learning how money works.