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Will childless Millennials turn America into Japan?

Here's a recipe for an economic armageddon: Take a rapidly aging society and a younger generation that's not having kids. The result? An incredible shrinking economy that's also burdened by huge costs to its Social Security and tax systems.

That's the grim future for countries such as Japan, where the population is forecast to decline by one-third through 2060, thanks to a sharp drop in birthrates and an elderly population. In the U.S., a childbirth trend among Millennials is raising questions about whether some of the same economic pressures could be in store for America.

The birth rate among American women in their 20s fell 15 percent between 2007 to 2012, marking an abrupt change from three decades of relatively stable birthrates, according to a new report from the Urban Institute. The plunge in births crossed all races and ethnicities, although a big reason for the drop is that fewer unmarried black and Hispanic women are having children, the study found.

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Women in their 20s gave birth in 2012 at a pace that would lead to 948 births per 1,000 women, or the slowest rate of any generation of young women in U.S. history.

"It's matter of concern," said Nan Marie Astone, one of the paper's authors and a senior fellow at the Urban Institute. "If birthrates don't recover, then that has implications for the future of the U.S."

Already, some businesses may see an impact from the recent dip in births. Pharmaceutical companies that make vaccines may need to plan for making fewer doses, while schools may want to plan for small enrollments as fewer children enter the education system.

The big question, however, is whether Millennial women will opt to have children as they enter their 30s. Ash Astone noted with a laugh: "Demographers are very bad at making predictions."

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Still, Astone said she believes the recession prompted women in their 20s to opt against having children, partly because economic slump coincided with the sharp drop-off. The economy has been slow to recover, especially for younger workers, who have suffered from higher rates of unemployment than other age groups. Previous economic crises, such as the Depression in the 1930s, also coincided with low points for fertility in 20-somethings, the study notes.

Of course, women overall have also been waiting longer to start families. The median age for a women's first birth is now 26 years old, compared with 21.4 years old in 1970, according to the Centers for Disease Control and Prevention. The question is whether Millennial women will decide to start families once they feel more stable economically, as previous generations have done after periods of financial insecurity.

Lower birth rates for unmarried women, especially for Hispanics and blacks, could also have some positive outcomes, Astone noted. Single mothers are more likely to be poor, given the financial costs of raising children as well as the time demands, which cuts back on the ability to work outside the home. Because fewer unmarried black and Hispanic women in their 20s are are having children, those women could potentially face lower levels of family inequality, the Urban Institute said.

"There are non-financial resources that older parents bring to raising their children and so an older average age at birth is a benefit for children in this sense," the report said. "As our economy becomes increasingly unequal, it is not clear how much more economically secure disadvantaged groups of young women and men will be in their thirties than they were in their twenties ... how (or whether) they will form families in their thirties is still very much in question."

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