The horse analogy is the sharpest framing in this piece, and the one that stays with me. What makes it uncomfortable is that it suggests the fertility decline is not a problem to be solved but an equilibrium being reached, which changes the investment thesis entirely.
If rising IVF adoption is the bullish case, the relevant question is not whether births recover but when, and whether the lag is short enough to matter for demographic-sensitive asset classes within a normal investment horizon.
The observation that markets are not priced for rising fertility rates is in my view the most interesting line here. Long duration assets, housing, education, consumer staples geared toward family formation, all carry implicit demographic assumptions that few allocators make explicit.
That asymmetry is worth taking seriously even if the timing remains genuinely uncertain.
I think the fall in fertility is less a pure affordability point and more along the lines of affordability challenges saps the spirit, which makes having children less likely. It's a loss of spiritual vitality.
The FT has done a lot of writing on the topic of falling birth rates. One of the things that they have highlighted isn't solved by either fertility technology or movements in the affordability of children and that is the fact that people are engaging in less committed relationships - something they described as "the global relationship recession" (https://www.ft.com/content/43e2b4f6-5ab7-4c47-b9fd-d611c36dad74?syn-25a6b1a6=1).
As a result the primary social structure through which people choose to bring children into the world is suffering from shrinking supply. There are many reasons for this of course one being that female economic empowerment means that they no longer have to get into or stay in sub-optimal relationships to meet their financial needs.
Another potentially being the "grass is greener" syndrome heighted by both social media and data apps. The latter of which makes switching costs (at least n terms of getting to first date state) so low that people no longer invest in their relationships beyond the first rocky moment.
I have heard about that theory... its a tricky one to either prove or disprove... but you could then just also argue increasing income inequality is as much to blame. If wealth was more equitably distributed, more men would be deemed worthy then?
Potentially but possibly only if middle and low income men took a disproportionate share of the wealth redistribution. The economist Gary Becker argues that there is both a gender wage disparity and household wealth effect at play that both put downward pressure on the birth rate. The first argues for a lower birth rate as the gender pay gap falls as the earnings and wealth accumulation opportunity cost of having children increases for women as their earnings go up relative to men. This discourages them from having kids. A thesis backed by this University of Michigan study: https://inequality.umich.edu/births-down-wages-up. His also argues that wealthier households go for quality over quantity, choosing to invest more in fewer kids. Which is a point that you already made referencing yourself of course.
IVF is not a silver bullet. Quoting from a recent discussion on the Trigonometry podcast (a trusted source for me), the success rate falls somewhere between 27 - 33%. Not the greatest of odds if you decide you really want children.
I think cost of living pressures - particularly housing - play a far greater role in this decision than employment laws and working environments that favour Parents.
What is most fascinating is that success rate in IVF is tied almost exclusively to the age of the egg, not the mother. Hence as cryogenic technology has improved, success rates for older mothers have improved.
Also, Japan has progressed in making embryos from skin samples, which when solved, will get rid of the most difficult part of IVF - harvesting eggs.
So the tech is progressing - but I also agree that cost pressures are intense.
Feels like the wrong (or at least ironic) question to a note that discourages this style of thinking but am curious how you go about expressing this through investments. I am across most of the fertility listed names and don’t find any very compelling. Maybe MD-NYSE as the most for me. Any thoughts from you?
I think HCA US is probably the best option - but not a pure play. But when I look at things like IVF, stem cell research and other longevity themes, there seems to me an opportunity in the harvesting and managing of genetic material over an entire human life - of which HCA is best suited. That being said, to buy HCA you need to have a strong view on US healthcare policy.....
The horse analogy is the sharpest framing in this piece, and the one that stays with me. What makes it uncomfortable is that it suggests the fertility decline is not a problem to be solved but an equilibrium being reached, which changes the investment thesis entirely.
If rising IVF adoption is the bullish case, the relevant question is not whether births recover but when, and whether the lag is short enough to matter for demographic-sensitive asset classes within a normal investment horizon.
The observation that markets are not priced for rising fertility rates is in my view the most interesting line here. Long duration assets, housing, education, consumer staples geared toward family formation, all carry implicit demographic assumptions that few allocators make explicit.
That asymmetry is worth taking seriously even if the timing remains genuinely uncertain.
I think the fall in fertility is less a pure affordability point and more along the lines of affordability challenges saps the spirit, which makes having children less likely. It's a loss of spiritual vitality.
https://andrewsiegler.substack.com/p/rich-parents-as-national-castration?r=ksoj&utm_campaign=post-expanded-share&utm_medium=web
Sharply laid out arguments. I believe the superhuman thesis which I think runs counter to meme-ish narratives.
There is definitely something to it... especially in sports where I spend a lot of time. Training is much more intense
The FT has done a lot of writing on the topic of falling birth rates. One of the things that they have highlighted isn't solved by either fertility technology or movements in the affordability of children and that is the fact that people are engaging in less committed relationships - something they described as "the global relationship recession" (https://www.ft.com/content/43e2b4f6-5ab7-4c47-b9fd-d611c36dad74?syn-25a6b1a6=1).
As a result the primary social structure through which people choose to bring children into the world is suffering from shrinking supply. There are many reasons for this of course one being that female economic empowerment means that they no longer have to get into or stay in sub-optimal relationships to meet their financial needs.
Another potentially being the "grass is greener" syndrome heighted by both social media and data apps. The latter of which makes switching costs (at least n terms of getting to first date state) so low that people no longer invest in their relationships beyond the first rocky moment.
I have heard about that theory... its a tricky one to either prove or disprove... but you could then just also argue increasing income inequality is as much to blame. If wealth was more equitably distributed, more men would be deemed worthy then?
Potentially but possibly only if middle and low income men took a disproportionate share of the wealth redistribution. The economist Gary Becker argues that there is both a gender wage disparity and household wealth effect at play that both put downward pressure on the birth rate. The first argues for a lower birth rate as the gender pay gap falls as the earnings and wealth accumulation opportunity cost of having children increases for women as their earnings go up relative to men. This discourages them from having kids. A thesis backed by this University of Michigan study: https://inequality.umich.edu/births-down-wages-up. His also argues that wealthier households go for quality over quantity, choosing to invest more in fewer kids. Which is a point that you already made referencing yourself of course.
IVF is not a silver bullet. Quoting from a recent discussion on the Trigonometry podcast (a trusted source for me), the success rate falls somewhere between 27 - 33%. Not the greatest of odds if you decide you really want children.
I think cost of living pressures - particularly housing - play a far greater role in this decision than employment laws and working environments that favour Parents.
I would recommend reading the HEFA report on IVF in the UK. https://www.hfea.gov.uk/about-us/publications/research-and-data/fertility-treatment-2023-trends-and-figures/
What is most fascinating is that success rate in IVF is tied almost exclusively to the age of the egg, not the mother. Hence as cryogenic technology has improved, success rates for older mothers have improved.
Also, Japan has progressed in making embryos from skin samples, which when solved, will get rid of the most difficult part of IVF - harvesting eggs.
So the tech is progressing - but I also agree that cost pressures are intense.
Wow ok interesting
Just want to say these are my fav posts of yours. Find them super fascinating
There is a new UK report on IVF coming out soon - will post again on fertility once it is out...
Last year's is here: https://www.hfea.gov.uk/about-us/publications/research-and-data/fertility-treatment-2023-trends-and-figures/
Feels like the wrong (or at least ironic) question to a note that discourages this style of thinking but am curious how you go about expressing this through investments. I am across most of the fertility listed names and don’t find any very compelling. Maybe MD-NYSE as the most for me. Any thoughts from you?
I think HCA US is probably the best option - but not a pure play. But when I look at things like IVF, stem cell research and other longevity themes, there seems to me an opportunity in the harvesting and managing of genetic material over an entire human life - of which HCA is best suited. That being said, to buy HCA you need to have a strong view on US healthcare policy.....