Early in the pandemic, many cheekily predicted that people quarantining with their romantic partners would lead to a spike in births in late 2020 and early 2021. But in a classic case of “Netflix and chill” being replaced by “Netflix and existential dread,” this hypothetical baby boom has morphed into a looming baby bust. And the potential short and long-term impact for the U.S. economy is concerning.
In the U.S., birthrates have been steadily declining for years and new projections from the Brookings Institution suggest that the coronavirus pandemic could lead to 300,000 to 500,000 fewer babies born in 2021. To arrive at this estimate, Brookings economists examined declines in birth rates that occurred as a result of past crises like the 1918 influenza pandemic and 2007 – 2009’s Great Recession. While those numbers provide some guidance, the influenza pandemic wasn’t an economic crisis and the Great Recession wasn’t a public-health crisis, so we lack true precedent for an event that incorporates elements of both.
In an effort to round out the picture, some researchers have used alternative forecasting methods that don’t rely on data gleaned from previous catastrophes. One such analysis examined the volume of Google searches for pregnancy and unemployment-related terms from earlier this year. Typically higher searches for conception and pregnancy-related keywords in U.S. states are associated with higher rates of birth in the following months, where higher searches for unemployment keywords are associated with the opposite. This keyword analysis predicts that between November 2020 and February 2021, monthly US births will drop by approximately 15%.
Who’s making tough choices
By any account, it seems certain that far fewer babies will be born in 2021. Financial difficulty, an unstable labor market and health concerns are just a few factors in womens’ decision to delay or alter reproductive plans amid the pandemic. And the problem isn’t simply that fewer babies will be born, rather, we’re likely to see a substantial demographic shift in which babies are born. As we highlighted in our coverage of the impending female recession, women of color are disproportionately burdened by the financial impacts of the pandemic. With higher rates of income and job loss, Black and Latinx women are more likely than other women to put off having a baby.
Braced for impact
In the immediate future, a sharp decline in births could spell trouble for makers of infant products. Nestle’s Gerber and Reckitt Benckiser’s Enfamil are bracing for reduced formula sales. Procter & Gamble and Kimberly-Clark, who own the Pampers and Huggies brands respectively, are also anticipating lower sales for their baby segments. These brands have already altered their model in recent years to account for slowing birth rates in the U.S. and China, turning to more premium baby products in an attempt to grow sales. Some, like Kimberly-Clark, are considering shifting focus to developing countries where birth rates are higher.
Looking long-term, the impact of sharply reduced U.S. birth rates could be profound. Currently the country’s fertility rate is at its lowest since 1985. At the same time, we’ve become a relatively elderly nation; by 2034, Americans over age 65 are expected to outnumber those under 18 for the first time. These factors could increase our already concerning shortage of workers able to drive the economy and care for our aging population. Fewer workers will also mean a lower GDP and fewer people contributing to Social Security.
Children born during the baby bust may have some small advantages later in life. A reduced pool of peers nationwide could result in smaller class sizes in early education settings, as well as less competition for getting into college or securing a job post-graduation. These advantages are a double-edged sword though, as fewer students could mean many institutions of higher education will lack sufficient incoming tuition and may be forced to close, contributing to further inequity in the education system.
From bust to boom?
Looking beyond the bust, one might expect babies born in 2022 to ultimately be at a disadvantage in the form of overcrowded classrooms and stiff labor-market competition. However, experts are not anticipating that every potential birth missed in 2021 will happen at a later date. Many women whose reproductive plans stalled during the pandemic will age out of fertility. Additionally, many couples will experience an enduring loss of financial stability as a result of this crisis that may drive the decision not to have a baby at all.
Ultimately, birth rates are expected to rebound to roughly pre-pandemic levels sometime after the threat of coronavirus subsides. This phenomenon was witnessed after other disasters like the 2003 SARS outbreak in Hong Kong and Hurricane Katrina in Louisiana in 2005. But with the pandemic impacting different sectors of society in different ways, it’s likely the baby bust will end little by little, not with a boom.