Alpha Consumer

Why the Recession Might Cause a Baby Boom

By Kimberly Palmer

Posted: March 11, 2009

Kids are expensive -- so a recession would cause people to have fewer kids, right?

Actually, no. Research from the National Bureau of Economic Research shows that once you control for divorce and the proportion of young marriages, then an increase in the unemployment rate increases fertility, suggesting that recessions can lead to mini-baby booms. (But without subtracting out those factors, fertility declines when the unemployment rate rises, suggesting that higher unemployment may cause marital stress which leads to divorce, hence no more babies for those couples.)

One possible explanation for the findings is that when people are laid off or under-employed, they see it as an opportunity to have more children because they have more time.

What do you think: With all of the recent lay-offs, will we see a baby boom in nine months?

If Great Depression compaison then no Baby Boom

Fertility rates plummeted during the Great Depression as unemployment and poverty rates increased. They did not significantly increase again until after World War II when people felt more comfortable having children again. Contraceptives were practically unavailable for that generation of Americans suggesting the 30's as compared to today.

The only rational counterargument to this would be that there was no significant welfare state in the 30's and 40's and therefore many parents living in poverty were truly fearful of having children they could not afford to buy food for (my grandmother only had a can of tomato soup to eat in the three days before my father was born in 1938), let alone shelter. With Food Stamps, "free" Medicaid health coverage, an economic downturn may be less of a factor today.

Time will tell if the existence of government support programs for the unemployed and others displaced by this severe recession will change the behavior we saw in the 30's and 40's.

R. Bates of CA @ May 10, 2009 21:09:06 PM

Hold on a second...

Recession seems to put people in the mood for condoms

http://www.usatoday.com/money/industries/retail/2009-02-11-cash-strapped-condoms_N.htm

Jeffry Pilcher | TheFinancialBrand.com of NV @ Mar 12, 2009 16:04:03 PM

The Earth Needs Less Kids, Not More

1- The earth has too many people as it is

2- Irrespective of the resource crunch and eco-crisis, having kids when your personal resources are at an all-time low is irresponsible- to yourself, to those around you with whom you pose an ethical dilemma (I don't want help for me, I want it it for my blameless hostage child), and to society at large.

There are too many people with kids, and not enough people who care about other people's kids. As a species, we are hardwired to think locally and care locally. This is unfortunate.

Kids are cute-- I like them, too. But too many grownups are just a more sophisticated version of Bristol Palin or Nadya Suleman.

j of NC @ Mar 12, 2009 12:31:35 PM

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Alpha Consumer

Alpha Consumer

Kimberly Palmer, senior editor for U.S. News & World Report, writes about how to save money, avoid scams, manage debt, and be a savvy shopper. Send your personal finance questions to her for expert money advice.


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