What Birthrates Indicate About Economic Growth

Study Declares Birthrates Decrease BEFORE Recessions

According to an article published on May 9, 2018, decreasing birthrates often precede an economic recession…why?

According to the study, before the last 3 major recessions birthrates started to decline.  The reason for this early signal that the economy is heading for recession is that people are the cause of economic recessions.

When people feel less frisky in the bedroom, less confident about the future and their finances, then they are less likely to have children.

These feelings lead to them taking other actions, like not buying stocks or not investing in businesses or buying property.

These actions eventually lead to economic recession.

Do Decreasing Birthrates REALLY INDICATE ECONOMIC RECESSIONS?

I researched whether birthrates really did decline before the last 3 recessions.

Since the article didn’t mention what the last 3 biggest recessions were, I spend some time working on figuring that out.

In Wikipedia they have listed SO MANY recessions that there seems to be no correlation between birthrates and recessions (CLICK HERE for the list).

I then googled what the 3 biggest recessions were and got another list (CLICK HERE for the list), and from reading through the severity of the recessions, determined that the last 3  big recessions were from:

#1 Big Recession in 1973-1975: OPEC oil embargo, wage price controls and lay offs, pulled off gold standard, 5 quarters of negative GDP growth

CLICK HERE to see for yourself that they did decline before 1973, and then start rising again after 1975.

1970 – Birthrate 18.4 (per 1000)

1971 – Birthrate 17.2 (per 1000) – DECREASE

1972 – Birthrate 15.6 (per 1000) – DECREASE

1973 – Birthrate 14.9 (per 1000) – DECREASE – RECESSION BEGINS

1974 – Birthrate 14.9 (per 1000) – NO CHANGE – RECESSION ENDS

1975 – Birthrate 14.8 (per 1000) – SLIGHT DECREASE

1976 – Birthrate 14.8 (per 1000) – NO CHANGE

#2 Big Recession in 1980-1982: Iranian oil embargo, high interest rates, unemployment over 10% for 10 months

CLICK HERE to see for yourself that they did not decline, but actually increased before 1980, and then start rising again after 1981.

1977 – Birthrate 15.4 (per 1000) – INCREASE

1978 – Birthrate 15.3 (per 1000) – SLIGHT DECREASE

1979 – Birthrate 15.9 (per 1000) – INCREASE

1980 – Birthrate 15.9 (per 1000) – NO CHANGE – RECESSION BEGINS

1981 – Birthrate 15.8 (per 1000) – NO CHANGE – RECESSION

1982 – Birthrate 15.9 (per 1000) – INCREASE – RECESSION ENDS

#3 Big Recession in 2008-2009: Subprime mortgage crisis, Global Banking credit crisis

CLICK HERE to see for yourself the birthrates is the US year to year in the 2000’s.  As you can see, there doesn’t seem to be a decline in births right before the housing crises either.

2005 – Birthrate 14.0 (per 1000) – NO CHANGE

2006 – Birthrate 14.3 (per 1000) – INCREASE

2007 – Birthrate 14.3 (per 1000) – NO CHANGE

2008 – Birthrate 14.0 (per 1000) – DECREASE – RECESSION STARTS

2009 – Birthrate 13.5 (per 1000) – DECREASE – RECESSION ENDS

2010 – Birthrate 12.9 (per 1000) – DECREASE

Conclusion

I’m not an economist, and maybe the authors of these research articles are using month to month birthrates or have different recessions in mind.

All I know is that as a layperson, it is hard to see that birthrates decline before great recessions.

I hope you also do your own due diligence when reading economic forecasts and news articles.

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