Recession is bad for the baby business

For another sign that The Great Recession is taking a toll on the population, look no further than the local maternity ward. The birth rate is falling after many years of slow but steady increase. Research that I presented at the 2010 Applied Demography conference tracked the trend in fertility during recessions, controlling for factors such as female labor force participation, contraceptive technologies, and other social trends. Recent publications from the Pew Research Center arrived at the same conclusion: births fall during recessions.

This trend may be contrary to popular logic. It is common to assume that for two-income families, a layoff means that one member of the family has more time on his (or her) hands for child-rearing and for... to be delicate... the activities that lead to child-rearing. However, research suggests that economically depressed times drag down more than just the stock market.

According to a survey conducted by the Guttmacher Institute, "Sixty-four percent of women agree with the statement, 'With the economy the way it is, I can’t afford to have a baby right now'."

Overall the survey suggests that women want to delay having a child because of financial instability resulting from the recession, and that most (but not all) are being more careful about contraception as a result. Data from the Nielsen market research company confirms that condom sales have increased since the recession started.

The survey responses mirror a trend that is beginning to show up in birth certificates. Nationwide the birth rate fell by 4 percent (from 4.3 million to 4.1 million) between 2007 and 2009. To put that into perspective, 185,000 fewer births is equivalent to the population of Little Rock, AR. Data for the first half of 2010 shows a continuing decline (data from CDC).

Declines were sharpest in the southeast and western states - those hit earliest, and perhaps hardest by the recession (see map). For example, the number of babies born to residents of California fell by nearly 24,800 (4.5%) between 2008 and 2009, and by more than 40,000 (7%) between 2007 and 2009, according to records from the California Department of Health.

The falling number of births can be linked to declining fertility across almost all population groups. This means that across all race and ethnic groups, and across almost all age groups, women are having fewer babies in 2009 than in 2007. Only women over age 40 saw any increase in birth rate over the past two years, and those minor increases were not sufficient to offset declines in all other groups.

So for as long as the economy remains in the doldrums, savvy market watchers should be investing in condoms, not in baby gifts.