When the economy takes a turn for the worse, birth rates go down. It's both common sense and an empirically observed phenomenon.
But it's not the whole story.
A team of economists, taking a closer look at the connection between fertility and recessions, found that conception rates begin to drop before the economy starts its downturn — and could even be used to predict recessions.
The working paper was distributed by the National Bureau of Economic Research, or NBER, on Monday. Unlike previous researchers, the economists focused on conceptions rather than births, by month instead of by year. The results were a surprise.
"We didn't go looking for this pattern,"says Kasey Buckles, an associate professor at the University of Notre Dame, a research associate at NBER and one of the authors of the study. "It's something that jumped out at us."
Take the Great Recession. The U.S. birth rate, rising before the recession, fell in 2008, as one might expect. But back up before that — to the middle of 2007.
The subprime mortgage crisis was hurting the housing market, but the broader effect on the economy was not yet apparent. Stock prices kept hitting all-time highs. Unemployment was below 5 percent. Analysts were confident, optimistic. In July, the chief economist of Standard & Poor's told NPR listeners that "the rest of the economy so far has been ignoring the housing crisis very nicely."
It was months before the recession began, as NBER later calculated it, and more than a year before the collapse of Lehman Brothers triggered a global panic.
But, the researchers found, the U.S. conception rate had already started to drop.
"That's what makes our results surprising," Buckle says. "While the best of the experts didn't see the Great Recession coming, it seems that families and households were feeling those tremors and responding to it."
The researchers focused on birth data from the National Center for Health Statistics, looking at clinical estimates for the month of conception. They compared that to the dates of the recessions, as calculated by the NBER, and to changes in the GDP.
The change in birth rates was driven by a drop in conceptions, not an increase in abortion or miscarriage, the researchers found. And the pattern held not only for the Great Recession of 2007/2008, but also for recessions in 1990 and 2001, where they weren't preceded by a drop in housing prices.
No one is arguing that the relationship is causal, or that fertile women have supernatural powers to predict the future. Instead, the researchers suggest, the same factors that cause a recession also have a "profound and rapid effect on fertility decisions."
The research suggests, among other things, that tracking conception in real-time might be useful for forecasting future economic events. It's not easy to track conceptions directly, but retail purchases (like pregnancy tests) or Internet searches (like for due date calculators) could provide a hint.
In other words: Just as your shopping habits allow Target to figure out that you're expecting, that same data might be used by an economist to help calculate the future of the GDP.
The Financial Times writes that economists have proposed other "unusual gauges" of economic health, from the discredited "lipstick index" to Alan Greenspan's argument that men's underwear sales fall at the start of a recession.
Meanwhile, the effect on fertility has real-life implications well beyond its predictive abilities.
The drop in fertility rate appears to be "quite persistent," the researchers note, suggesting "an arguably under-appreciated channel by which the impact of a recession can persist, possibly for generations."
In the case of the Great Recession, fertility rates now continue to lag even as unemployment is down and the economy is rebounding by a number of measures. The years since the recession have been a sort of "babyless recovery," Buckle says.
The researchers suggest several possible explanations, including the natural time lag with attempting to conceive, the increasing age of first-time mothers and the growing popularity of long-acting birth control.
But if you're wondering what this says about our future: Buckle says she sees no signs of sudden deviations in the birth rate. "That's not making me, anyway, especially nervous," she says.