Tuesday, June 23, 2020

The Baby Bust

Looks like the new world will contain fewer children.

The Brookings Institute predicts that around 300,000 to 500,000 fewer babies will be born next year. “Economics matters,” they note; births decline as the result of a damaged economy, and the numbers were arrived at after considering a variety of economic factors. They also looked at the data from the (inaccurately named) Spainsh Flu of 1918. That pandemic, as we know, had three distinct spikes in the death rate – and there were three distinct drops in the death rate nine months after each. The total drop was about 12%; during the more recent Great Recession, it was 9%. The Brookings numbers suggest we'll see a 10% drop.

So – no baby boom. CNN's Dr. Sanjay Gupta explains:

Basically, the bottom line is this: when there's a storm warning, there's some data that suggests that the rate of pregnancies increase, but actually when destruction happens, like a tsunami, then actually your births go down,” Gupta said.
So there's a difference in what the impact on society is of any natural calamity or a pandemic – and the forecast suggests that this is much more serious than a tropical storm. It's a tsunami.”

A tsunami, indeed. Many people feel they cannot afford to have children in the best of times; when the bottom drops out... And with the strong possibility of a second wave in six months, who wants to be pregnant and sick?

What effect will the lower birth rate have? It will probably depend on whether the drop will affect some groups more than others. Will it be concentrated in some demographic, or distributed evenly? America's birth rate is already declining, as are the rates in many developed countries. The economic impact of these trends will be substantial – especially their effect on economic growth.

Something to look forward to.

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