Will More Firstborns In The Future Mean Less Economic Dynamism?

Will More Firstborns In The Future Mean Less Economic Dynamism?

Beneath the long history of findings that sing the praises of firstborns, there’s another, interesting story to tell about their economic Achilles' heel.
Lyman Stone
By

Everyone with siblings has at some point read an article about “birth order” and found in it a remarkable confirmation of all the things he or she always thought about his or her siblings: younger kids see reports saying firstborns are domineering and respond “Well, of course they are!” Older kids see reports saying firstborns make more money, and pat themselves on the back: “Of course we do!”

Commentary on birth order and sibling personality differences, obviously, has an ancient history: look no further than the biblical account of Cain and Abel for an early exploration of how kids can turn out so differently. However, while much birth-order commentary is mere anecdote or wishful thinking, new research adds fuel to the fire.

This new working paper, which has not yet been thoroughly reviewed and vetted, argues that firstborn children are better at basically everything: they’re more emotionally stable, higher-earning, better educated, and more likely to assume leadership roles. This finding is pretty standard, and has been replicated in many different studies in many countries. Interestingly, even some supposedly quasi-genetic features turn out to be sensitive to birth order: IQ, for example, declines with birth order.

All Is Not Well In Firstborn Land

But beneath the long history of findings that sing the praises of firstborns, there’s another, interesting story to tell. In the 1990s, researchers suggested that while firstborns might have an advantage in many conventional skills, later-born kids might be more innovative, creative, or entrepreneurial. Then in the 2000s, that view was challenged, saying that, no, what was actually happening was that more later-born kids meant a bigger family, and larger families drove greater entrepreneurship or innovation.

Other research has shown that some family structures are better for entrepreneurship than others, especially extended families that maintain close ties. Such large family networks help support business formation because they make it easier for people to raise money, as initial fundraising is usually from friends and family. This new study fits into the story nicely by having better controls for family characteristics and parental investments of time into kids, because they used data from Sweden, and Nordic countries have notoriously complete (that is, invasive) record-keeping.

The study finds that, controlling for family size, education, income, and other characteristics, the later-born a child is, the weaker his or her social skills, leadership ability, conscientiousness, agreeableness, emotional stability, extraversion, and openness to the ideas of others. Not surprisingly, then, our disagreeable, unstable, introverted, low-social-skill later-borns tend to gravitate towards—entrepreneurship and self-employment!

It may seem odd at first that individuals who don’t test well on “leadership” traits would be more self-employed, but it’s actually pretty simple to explain. Later-borns are more likely to be argumentative, stubborn, and dead-set on their own ideas, characteristics that don’t work well in most workplace environments, but are archetypal of entrepreneurs. Notably, the study found that birth order had no impact on “creative” employment among all later-born kids, but for boys specifically, being later-born was associated with more “creative” work.

The Difference Seems to Be in How Parents Change

There’s been significant debate about the sources of these differences, but this newest study provides a tidy solution. Its authors identify families where biological firstborns were put up for adoption or died very young, resulting in “biological birth order” differing from “social birth order.” It turns out, only social birth order has negative consequences, while biological birth order actually improves many outcomes. That is, whatever direct biological component might exist (and no specific mechanism is hypothesized), that component has little to no observed impact, with the bias of any possible biological difference tilted towards later-borns. What first-born advantage exists does so because of something that isn’t quite biological.

Using data on parental working hours and home-life activities, the researchers suggest that most of the birth-order gap is explained by the fact that parents spend more time with their firstborns, working fewer hours away from home, and engaging in more shared activities. Heavy parental involvement not only clearly associates with good things (like reducing obesity and boosting conscientiousness), but also has more ambiguous results, like boosting extraversion and agreeableness.

Extraverted older siblings and nice people of all stripes may feel some smug satisfaction to hear their disagreeable and introverted younger siblings are that way because mom and dad neglected them, but it turns out that the evidence supporting parental investment is pretty dubious. Parents tend to invest more time in kids who already have “better” genetic endowments, so we should be a bit skeptical of the idea that parent time directly causes birth-order differences.

How This All Relates to the Larger Economy

But more to the point, society may ultimately be on the side of the younger siblings anyway. One of the most troubling trends in the American economy today is declining “economic dynamism,” which means many different things to different people, with definitions ranging from falling migration to fewer job transitions to longer unemployment to less entrepreneurship. Broadly speaking, the idea is that the American economy is losing that special sauce that has always helped us to bounce back fast and hard from any economic setback. Americans may be becoming more and more rooted and set in our ways, and, if true, that’s probably a bad thing.

There are numerous possible sources of this problem, and it remains hotly debated. But if research on birth order is to be believed, one partial source of falling dynamism may just be falling birth rates. When people have fewer kids, a larger share of kids will be first-borns or only-children. Regardless of the causal source of their difference, these small-family firstborns are less likely to be self-employed, possibly because they have personality traits that make conventional employment more attractive.

Among males, these firstborn kids may also be less likely to be employed in creative work. If the changing composition and size of families causes Americans to become less tolerant of risk and change, then falling birth rates could well rob us of one of our great cultural distinctive markers. This process will take generations to complete, but the developed world’s declines in family size began several generations ago.

One last brief point, if you’ll permit me. If it is true that smaller families and more firstborns represent a cultural change away from traditional American norms, then the defenders of the traditional American lifestyle in this regard are clearly recent immigrants. Even after controlling for age differences, immigrants have substantially more kids and larger families than natives, and often stronger extended families as well. Immigrants also come from societies with larger families too, so may be more likely to be later-borns themselves.

But with immigration slowing down over the last 10 years, even this last source of big families and non-firstborns may be drying up. If these trends continue, then the long-run forecast must simply be that falling birth rates and family sizes won’t just alter the world around us; these trends will alter even the typical personality of an American child, and with them the whole psychological landscape of the Western world.

Lyman Stone is a Senior Contributor at The Federalist. He writes about migration issues on his blog "In a State of Migration." He is also an agricultural economist at USDA’s Foreign Agricultural Service, and an Advisor at Demographic Intelligence. He has an MA in international trade policy from the George Washington University. Opinions expressed are solely his own, though his wife Ruth occasionally agrees with him.
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