Effect of Economic Downturns on Fertility
The effect of economic downturns on births is surprisingly complicated. On one hand, people have less money and kids are expensive*, which you would expect to lead to fewer children. On the other hand, a reduction in employment expectations reduces the opportunity cost of children, which you would expect to lead to more.
For the rest of this article, I will by default be referring to WEIRD countries.
Based primarily on Economic recession and fertility in the developed world and spot checking its sources, my conclusion is that modern recessions temporarily decrease per capita births, but by and large do not change cohort fertility (i.e. women have the same number of total children they would have had without the recession, but later). Some trends:
- The reduction in births is seen mostly in younger women (20-24), not older women (30-34), suggesting this is a voluntary decision incorporating knowledge of ability to have children in the future.
- The effect is much larger for first births than subsequent births, suggesting this may be more about union formation than post-union decisions to have children (this could also explain the age-related effects)
- The change seems to be driven more by change in situation than by absolute status, i.e. there isn’t a strict relationship between per capita GDP or unemployment and fertility that holds across countries, but in countries where children and women have the same status, people will react similarly to a change in circumstance.
- Male unemployment is universally bad for fertility.
- Female unemployment depends on the era (used to be positively associated with fertility, now is negatively) and on a woman’s socioeconomic status (richer/better educated women’s fertility is more procyclic than poorer/worse education women’s).
- Generous unemployment insurance or non-employment-linked maternity benefits unsurprisingly raise the birth rate during a recession.
Specific numbers are hard to give because every country, demographic, and recession is different, but as an example, this article estimates ~9% decrease in fertility in 2013 in the US.
* This is in societies where children are economic sinks. In situations where they are assets, you would expect the reverse.
My full notes are available here.
Thanks to Eli Tyre for research assistance.
For posterity: I'd predicted a decrease in fertility but hadn't put numbers on it.