A birth certificate (that of course matches the approximate age, and the definitive sex and race of the holder) is what's called a "breeder document." That means it can be used to obtain other more valid forms of identity such as a driver's license and then a passport.
Losing a birth certificate (or having it stolen) is a serious concern and it should be reported to the police ASAP. You should immediately run a credit check on yourself and you should contact the DMV (Department of Motor Vehicles) in your state to ensure that new fraudulent ID hasn't been issued in your name.
Unless there's a valid reason for someone to see your birth certificate or use it for identification, you should keep it at home or in a safe deposit box, locked away. This also includes the birth certificates for other family members,
NOTE: I wrote this answer more than two years ago (in 2011) and I have to emphasize it even more today. If I resemble you closely in race/age/ethnicity and I have a copy or an original of your birth certificate, I AM YOU to people who don't know you.
I can obtain any number of other breeder documents and I can become "you" in anywhere from a few hours to several weeks. If I committed dozens or hundreds of crimes, financial improprieties or social faux pas ' in that time period, YOU will be blamed for them until (and probably well after) I am uncovered, arrested and potentially prosecuted.
If you lose your birth certificate and you suspect that it may have been stolen or misplaced outside your home, contact the police immediately.
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