AUSTIN, Texas — Big-name U.S. businesses are relocating to Texas, where they’ve been lured in by the Lone Star State’s strong economy, business-friendly taxes, low housing costs and thriving urban centers.

What You Need To Know

  • Texas’ birth rate is in decline, and that could adversely affect the future of the state’s labor market

  • Like in the rest of the country, many young Texas women are delaying having children

  • Researchers say a legal immigration system could help fill the labor market gaps

There’s just one hitch, according to a new report from the Federal Reserve Bank of Dallas.

Texans aren’t having enough babies to fill all the anticipated job openings in the coming decades. 

Texas' birth rate is declining more quickly than the national average, which has some experts concerned about future labor shortages that could threaten the state's economic growth. 

A report by the Federal Reserve Bank of Dallas shows that the birth rate in the U.S. has been dropping since 2007, falling from 69 to 58 babies per 1,000 women ages 15 to 44. That’s a nearly 16% decline.

But in Texas, the birth rate has declined faster than the national average, falling 21% from 79 births to 62 births during the same period, according to the report.

The total fertility rate or the number of children one woman will have in her lifetime, for women in Texas is 1.8 children compared with the U.S. average of 1.7 children, according to the report. But both the state and national rates were below the replacement rate or the number of children needed to sustain the size of the population in absence of migration, which is 2.1, the bank’s researchers found.

“We are going to have fewer people in the workforce, we're going to have fewer taxpayers to support the social safety net programs that exist particularly for retirees,” said Collins of the Bush Center. “It also means we really do need to be concerned about the productivity of the state's economy going forward.”

Hispanics are the fastest-growing demographic in Texas, accounting for 39.3% of the state’s total 29 million population. But Hispanic women, too, are having fewer babies. 

Hispanic women make up 42 percent of women of childbearing age in Texas, but since 2007, they have had 31% fewer babies. 

The birth rate decrease is most dramatic among young women. From 2007 to 2019, the teen birth rate fell 61% in Texas, while the birth rate for women in their twenties fell 27%. 

Medical advancements also contribute to women choosing to have children decades later than previous generations did. 

“It's not just a problem in the United States. You see this in a lot of different places,” said Laura Collins, the director of the Bush Institute SMU Economic Growth Initiative. “For a lot of economies, the more developed they become, the fewer children are born per year.”

Jaclyn Basilone says there are a number of reasons why she and her husband haven’t had kids yet, including the life changes brought about during the pandemic. 

“There's so much uncertainty right now, is now the time to bring a child into the world?” Basilone, 33, said.

But Basilone is part of a trend that began years before the start of the pandemic in 2020. 

Birth rates tend to drop as women become more educated and have more access to birth control. Case in point: Basilone says pursuing her bachelor’s and master’s degrees contributed to her delaying having kids. 

“I think millennials and Gen Xers are just taught that we need to achieve so much, and I think we are on a railroad track— almost assembly line— where the value of education and achieving and getting the job and being self-sufficient is so important that family takes a step back,” Basilone said.

“We know now that women are capable of having babies much, much later in life and the baby will be absolutely fine. So I just think that it's okay to wait,” Basilone said.

Researchers said that in addition to automating and outsourcing jobs, bringing in more people to meet the demand for labor is an important tool to address the problem. That means supporting legal immigration as a means of importing needed labor, Collins said. 

"One of the things that we think is really important at the Bush Institute is that we have a legal immigration system that's functional that has more legal opportunities for people to migrate at all skill levels,” she said. “Much of our immigration system now is geared towards people only with a college degree or higher or people who only have family relationships here, when we know there's a lot of open jobs and regardless of whether you have a bachelor's degree or not.”

Having a system with a broad range of opportunities for people to come in through legal channels really matters, Collins said. 

Researchers like Collins say there is a concern not enough of that is happening in the U.S. to capitalize on the economic growth in states like Texas.

Collins pointed to a massive decline in legal immigration over the last couple of years as a contributing factor to the migrant surge being seen on the U.S. border with Mexico this year and in previous years.

“You see what you see at the border because there are so few legal channels for a vast majority of the globe. If they knew that they had more legal options than just asylum, they would utilize those channels because they would be safer, they would be faster, they would be more productive.”

Still, experts warn that even with more migration, it won't be enough to offset the declining birth rate.