Do you have a friend, coworker or family member who recently welcomed a new baby? If so, they're part of a nationwide trend. In the wake of the COVID-19 pandemic, the U.S. has experienced a subtle "baby bump," according to a new National Bureau of Economic Research working paper co-authored by Northwestern University economist Hannes Schwandt.
Schwandt and his coauthors - Martha Bailey of UCLA and Janet Currie of Princeton University - recently analyzed demographic data covering all U.S. births from 2015 through 2021 and all births in California from 2015 through August 2022. They found that birthrates in the U.S. declined slightly as lockdowns began in early 2020, but rose again in 2021 to create a net increase of 46,000 births above the pre-pandemic trend across the two years combined.
The decrease when lockdowns began in 2020 - nine months too early to represent a fertility response to the pandemic-were mostly due to fewer foreign-born women entering the United States as immigrants and having children here, according to the study.
The increase in 2021 was driven largely by women without children (first births) and women with a college education, who may have been more likely to benefit from working from home.
The 2021 increase in fertility - which has continued through the summer of 2022, according to the California data - was "the first major reversal in declining U.S. fertility rates since 2007," the authors wrote.
Schwandt noted that early forecasts suggested that as many as 500,000 fewer babies might be born in the U.S. because of the pandemic, but that the situation actually played out very differently. Potential reasons were the pandemic government aid that kept many Americans financially secure and the expectation among many people that the economic crisis would be short-lived.
"There was less financial insecurity in the short run, but there was also less financial insecurity in terms of people's expectations. And both of those made it a much milder shock in terms of the fertility response than the typical recession," Schwandt said.
Flexibility created by work-from-home measures, along with reduced opportunity costs in other areas - women didn't miss out on travel or social activities by being pregnant, because those activities were canceled - may also have inspired some people to have children, he said.
Economic implications: Could increased flexibility for women lead to higher birth rates?
The birth rate has important implications for society, because it affects broader trends in the economy. If younger generations are smaller than older ones, fewer working people are responsible for supporting a larger number of retirees.
This is exactly the trend that has been observed in much of the developed world, which has seen declining birth rates in recent decades. In the U.S., the average number of children per woman decreased from 2.1 in 2007 to 1.6 in 2020.
However, in 2021, not only were an unusually high number of babies born, but many of the women who decided to have babies were also having their first child. If some of those women also have a second child in a few years, the pandemic "baby dividend" could keep paying Schwandt said.
Many of the women who had babies in 2021 were college-educated, and may have benefited from increased flexibility in their work schedules and more time working from home. For college-educated workers, financial situations overall also tended to be better, because many of those workers saw their investments and homes increase in value during the pandemic.
Women who were not college educated and some other subgroups continued to see declining birth rates, in keeping with pre-pandemic trends. Schwandt said that thinking comprehensively about how people make the decision to have a baby - largely, an economic decision - could be a good idea for policymakers. The study also emphasized the importance of immigration in keeping the birth rate up, he noted.
"That some women may be more apt to have children if they have higher flexibility is a very interesting, important takeaway, especially since the U.S. lags behind other developed countries in terms of (maternity-related) benefits," Schwandt said. "And even though European fertility rates in general are lower than those in the U.S., at the same time, we have a lot more immigration. That's another takeaway: We saw how important those immigrant mothers are for the U.S. birth rate."
