We are Already in a Baby Boom

Fertility rates are trending upwards for the first time since 2007.

When the early days of the pandemic forced many to shelter in place, many predicted a subsequent “baby boom.” Some criticized the predictions as too fanciful but, at least according to one report, birth rates are going up for the first time in 15 years.

A new joint study from researchers at UCLA, Northwestern, and Princeton universities reported U.S. birth rates of 6.2%. 

In the U.S., the average number of children that a woman expected to have in her lifetime has been dipping since 2007 — the number was 2.1 in 2007 and 1.6 in 2020, with the latter reflecting both overall trends and a pandemic-related dip in foreign mothers giving birth in the U.S.

By 2021, the fertility rate had increased for the first time in 14 years.

More Babies Than at any Other Time Before 2007

“The 2020 decline in fertility rates occurred too soon for the decline to be a response to economic uncertainty or job loss during the covid-19 recession, as predicted by standard economic models,” the study’s authors write. “Rather, the bulk of the decline was driven by sharp reductions in births to foreign-born mothers who accounted for 23% of all U.S. births in 2019.”

But in only one year, local mothers stuck at home with their partners experienced a “small baby boom.” For reasons that the authors partially attribute to more time spent working from home, a number of demographics saw particularly high birth rates–women under 25, women aged 30 to 34, and women aged 25 to 44 with a college degree. 

Even though economic downturns traditionally bring fertility rates down, the latest pandemic has had largely the opposite effect–while the spike is still far from dramatic, many families were somewhat shielded from economic peril by various government programs and chose to expand their families.

“A possible reason for the reversal of the regular relationship of unemployment and fertility is that the covid-19 induced recession was unlike previous downturns,” the study’s authors write, referring to the $650 billion the federal government spent on pandemic unemployment benefits. “[…] There was also an unprecedented rise in remote work, particularly for more educated workers, and 40% of days worked were still at home by spring 2021.”

The Baby Boom and the Stock Market

On the flip side, limited access to reproductive health may have led to pregnancies that would have otherwise been terminated among younger women. Some older women, by contrast, contributed to decreased rates after not being able to access the treatment needed for a successful pregnancy.

“Women ages 35 and older show a striking 8-10% decline relative to the pre-pandemic trends in January 2021, which might reflect disrupted access to assisted reproductive technology services that they are more likely to use,” write the authors. “The dip however was quickly reversed–for women 40 and older, the birth rate peaked at 13% above trend by mid-2021.”

A baby boom has implications on everything from the labor market and social services to Wall Street. While only a long-term look will be able to show whether we are in a new boom or a recovery from an earlier dip, this year’s numbers point toward at least one strong birth year.

“Consider the demographic indicator that researchers have found to be best correlated with the stock market’s long-term return: The so-called Middle-Young (MY) Ratio, which is calculated by dividing the size of middle-aged cohort (ages 35-49) by the size of the young cohort (ages 20-34),” Mark Hulbert wrote for TheStreet in 2021.

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