The Coming Baby Deficit

babies next year. The economic implications of that deficit will linger long after the pandemic ends, as fewer babies means fewer consumers, fewer workers, and fewer taxpayers. In a time of transformation, u L knows that trust is necessary for innovation and business success. We use science and data driven insights to help you build the trust. Stakeholders demand. The future relies on trust, and you L empowers it. Learn more and access free research at UL dot com. Slash trust.

The coming baby deficit, the COVID nineteen crisis may leave a lasting imprint on us or till the trends taking a toll on growth. By Peter Coy Pandas and white rhinos aren't the only creatures that are unsuccessful at mating in captivity. The folk wisdom that humans will copulate when left with nothing else to do, dubbed the blackout babies theory, surfaces regularly in the immediate aftermath of disasters, but the

baby boom never materializes. The COVID nineteen pandemics spawned predictions that stay at home orders would eventually deliver a baby bump, Yet far from having more children than usual, Americans are expecting fewer in bedrooms across the US, Couples are making decisions that in the aggregate, could prove as consequential for the long term health of our economy as those taken

by policymakers in Washington. Fewer children now means fewer consumers, workers, and taxpayers in the future, in other words, a smaller economy than otherwise, though also a smaller environmental footprint, which

brings its own rewards. Wolfgang Lutz, an Austrian demographer, warned in two thousand and six that European nations were at risk of falling into a fertility trap, in which there are fewer women alive to have babies, Smaller families become the social norm, and low population growth reduces economic growth, fostering a pessimism that further suppresses the birth rate. It appears that Denmark, among others, has taken Lutz's message to heart.

A public service announcement urges older Danes send your child on an active holiday and get a grandchild within nine months. At the time Lootz raised the alarm, the U s seemed well clear of such a trap, with a total fertility rate of two point one children per woman, what demographers call the replacement rate versus one point five for the European Union. Now that the US rate is below

one point seven, that's no longer assured. Unromantic as it sounds, planning a family is a numbers exercise that factors in the age of the would be mother, access to affordable childcare, college costs, income and job security. Toss in a national health emergency and an economic crisis that invites comparisons to the Great Depression, and the benefits of parenthood no longer

pencil out for many. The Guttmacher Institute surveyed about two thousand American women in late April and early May and found that wanted to delay pregnancy or have fewer children as a result of the pandemic that outweighed the seventeen percent who said they wanted children sooner or more of them. In June, the Brookings Institution released a study predicting the

US is headed for a large, lasting baby bust. Its researchers forecast there will be three hundred thousand to five hundred thousand fewer children born in the US than there would have been absent the crisis, which amounts to a decrease of roughly ten from That means the number of babies never born is likely to greatly exceed the number of America kins who have died from coronavirus, which is now about one fifty thousand. The effect on population will

be longer lasting as well. Many of the babies who aren't being born would have lived into the twenty second century. A lot of people I know at work and friends are saying they don't want to have children until this is over, says Tory Marsh, director of research at good r X, a price comparison and coupon site for prescription drugs based in Santa Monica, California. Marsh postponed her wedding, which had been scheduled for November. Because of the pandemic,

it is definitely pushing back the timeline for babies. She says. If couples fully make up for lost time by having more children later, this drop in the birth rate will end up being just a blip. But demographers predict that many, if not most, of the births that are delayed will

never be made up. There is this Panglossian narrative that delayed births will tend to recover, but statistically it doesn't happen, says Lie in Stone, chief information officer of Demographic Intelligence, a consulting firm whose clients have included Procter and Gamble and JP Morgan Chase. Lack of time is the most important reason the birth rate is unlikely to revert back

to trend once the pandemic is over. While young women will still have plenty of years to give birth to their desired number of children, older ones will need to space births more tightly to reach their targets. In their remaining fertile years, some will run out their biological clock waiting for baby making conditions to improve. Every time that people decide to push back when they're going to have

their first kid or their next kid. Some proportion will end up not having the child at all, says Karen Guzzo, a sociology professor at Bowling Green State University and acting director of the Center for Family and Demographic Research. For couples who are already parents, says Guzzo, the longer you wait to have your second or third child, the harder it is to say, oh, I'm ready to have babies again. They say, you know what, my family is complete. I'm

happy with what I have. In the second half of the twentieth century, the pattern in the US and elsewhere was that fertility tended to fall during recessions and then bounced back when the economy recovered. Demographers expected that to happen after the two thousand and seven to two thousand and nine recession, which at the time had been the

deepest since the Depression. People put off having children during the economic downturn and then catch up on fertility once economic conditions improve, Pew Research Center wrote in October report. But the pattern broke. The post recession rebound never came, even as the U s economy staged the longest expansion on record. Birth rates for women in their twenties, which had dropped twenty five or more during and shortly after the recession, kept falling and they stayed flat for women

in their thirties. Had pre recessionary fertility patterns been sustained through, there would have been six point six million more births and nearly three million more women would have had their first child over the last eleven years, says Kenneth Johnson, a sociologist and demographer at the University of New Hampshire's Carci School of Public Policy. Early indicators point to the

birth rate moving down another notch in this recession. The Wedding Report says its surveys show that slightly over sixty of weddings scheduled for have been postponed until later this year or one that's bound to delay some couples from starting a family. Also, when the pandemic broke out, birth control providers reported an increase in sales from people stocking up in case of shortages. Some sources have also seen a bump in demand for long lasting forms of birth control.

The Pill Club Holdings logged a sixty increase in June in new patient requests for an overa a vaginal ring that prevents pregnancy for up to a year. In the US, contraception has generally been available to those who need it, in contrast to the situation in poor and middle income countries, where disruptions and access to birth control may result in as many as seven million unintended pregnancies in just half a year, according to an April estimate by the United

Nations Population Fund. Planned Parenthood Federation of America has seen an increase in demand for abortion pills, according to doctor Gillian Dean, senior director of medical Services. She says several women have come to her for help to end pregnancies that they would have wanted to continue were it not for the economic fall out of the pandemic. With almost eighteen million Americans out of work as of June, it's no wonder many couples might not be in the mood

for procreating. Demographer Sergio Della Pergola has documented a tight statistical correlation between optimism and fertility in Israeli society. The Bloomberg u S National Economy Expectations Diffusion Index, which gauges consumers economic outlook, crashed below thirty in April and May from fifty seven in February, recovering to thirty eight point five in July. Not everyone will wring their hands at

the thought of all those missing children. Some environmentalists may view the US birth dearth as good for the planet. Each American consumer is responsible for about three times the amount of greenhouse gas emissions as a Chinese consumer, according to a nineteen report by the United Nations Environment Program.

A twenty seventeen study from Sweden's Lund University published in Environmental Research Letters found that having fewer children is the best thing that people in rich countries could do for the planet, far more effective than buying an electric car or refraining from air travel. On the other hand, each child who's wanted but not born is some Famili's quiet tragedy. Surveys such as the National Survey of Family Growth show that the average American woman wants two children, or possibly three,

depending on how long it lasts. The COVID nineteen crisis may compel many women not to fulfill that design. Fire For the economy, fewer future workers will entail a bigger burden on each one to support future retirees. Every two tenths decline in the total fertility rate. That is too fewer children per ten women necessitates an increase in the social security payroll tax of about point four percentage points.

According to a table in the annual Report of the Trustees of the Social Security Trust Funds, slow or negative population growth tends to depress economic dynamism, some economists argue.

In a research paper published in January, Charles Jones, a professor at Stanford University's Graduate School of Business, posits that so called natalist policies, such as offering couple's financial incentives to have more children, could spell the difference between an expanding cosmos of exponential growth in both population and living standards and an empty planet in which incomes stagnate and

the population vanishes. It's worth noting that countries, including hungry Poland and more recently Russia, have had little success in reversing declining fertility rates with subsidies. Even when the pandemic is over, many of the factors that have pushed down fertility rates in the US will remain in place. Those include the penalty to women's careers for having children and

the high cost of childcare, education, and health insurance. Childcare is particularly salient for couples who already have one child because they're more aware of how problematic it is, says Bowling Green's Guzzoh. In some states, childcare is more expensive than college. As important as child care is pandemic related, federal aid given to the sector has been less than

the sum given to Delta Airlines. University of Michigan economist Betsy Stevenson told Politico Magazine any attempt to divine the future of fertility is complicated by the fact that there are different ways to measure it, and sometimes they contradict each other. One indicator that's pointing strongly negative is the number of earths, which hit a thirty five year low last year and is likely to be even lower this year.

Another is the total fertility rate, which is a snapshot of the birth rates for women of all ages in a given year. It has fluctuated wildly over the past century. It was three point thirty one at the end of World War One, fell to two point fifteen during the Depression, rose to three point sixty eight in nineteen fifty seven, fell to one point seventy four in nineteen seventy six, then rose to two point one two in two thousand seven.

At that time just before the financial crisis, the U S rate was among the highest of the wealthy nations. A total fertility rate of about two point one the replacement rate is what's required to stabilize the population over the long term, but the two thousand seven peak in fertility was short lived. The rate fell in the last recession and kept going down after it, falling to one point eighty nine and twenty eleven and hitting one point

sixty eight last year. The fact that the total fertility rate has fluctuated widely suggests that there's at least a possibility its next move is up. That's what the Social Security Trustees are banking on. Their twenty twenty annual report, which was prepared before the pandemic, makes an intermediate projection that the total fertility rate will rise to one point ninety five by twenty twenty nine and then stay there through twenty ninety five, the end of the forecast period.

In an emailed statement, Social Security Chief Actuary Stephen Goss cited the surveys that women want two or more children that suggests that the current reduction in the total fertility rate will not be permanent. He wrote, setting aside the current crisis, it's possible that today's twenty something women intend to have babies at later ages than their mothers or older sisters did. If so, that wouldn't be reflected in today's low total fertility rate. The total fertility rate is

a tricky concept. It's the number of children an imaginary woman would have over her lifetime if likelihood of having a baby in each year of life matched what the birth rate is now for women of that age. For example, at sixteen, she experiences the birthrate of today's sixteen year olds. At thirty eight, she experiences the birth rate of today's thirty eight year olds. In contrast, the easier to understand completed fertility rate measures how many babies women actually have

over their reproductive lives. That number has stayed high. Today's women who are forty nine years old have had two point one children on average, which is a bit higher than the forty nine year olds of a few years ago. Certainly, women who are undergoing fertility treatments are as determined as

ever to have children. Eva Pensi Moog, thirty one, a user experience designer from Chicago, says some of the older women in her infertility support groups are literally in a race against the clock to collect as many eggs as they can before they're gone. Julie christ thirty nine and Rachel Anderson thirty one, of Bristol, Connecticut, it who have a nineteen month old son, are trying for another child via in vitro fertilization. Sometimes we ask ourselves, what the

heck are we doing. The world is so weird, says Anderson. You can call it naive. We want kids with Alexander Tensi and Mayieve She. And that's this week's cover story by Peter Koy. Find that story and all of the latest issue at Bloomberg dot com and business week dot com. I'm Jason Kelly. Check us out. Every day are Bloomberg Business Week Radio Show from two to six pm Wall Street Time. This is Bloomberg.