Women are taking a ‘rain check’ on babies, and it could change the shape of the economy

millennialskids_ Alexi Rosenfeld
The number of births have been declining during the pandemic.

  • America is seeing a “baby bust” as women put off having kids during the pandemic.
  • The drop in births intensifies a pre-pandemic trend of decreasing birth rates and fertility rates.
  • It could slow down the economy in the long term, but it could also result in a delayed baby boom.
  • See more stories on Insider’s business page.

The predicted baby boom is looking more like a baby bust.

While many thought a year locked up would lead to some serious babymaking, Brookings Institute economists Melissa Kearney and Phillip Levine forecasted the opposite last June: The pandemic would lead to 300,000 to 500,000 fewer births in 2021, they said.

So far, their predictions are on track.

Nine months after the first lockdowns began in the US, the number of births in the country had declined by 7%, according to data provided to CBS News by health departments across more than 24 states. And fertility rates – the number of live births a woman is expected to have over her lifetime – are already lower in the first few months of 2021, said Christine Percheski, associate professor of sociology at Northwestern University.

“We’re going to see many fewer babies in 2021,” she told Insider.

The drop continues a pre-pandemic trend of declining birth rates and fertility rates, as childbearing women, many of whom are millennials, delay having children. Both of these rates decreased by 2% from 2017 to 2018, per the latest CDC data, with the birth rate hitting its lowest in 32 years. As of January 2020, the US fertility rate sat at 1.73 births per mother – a stark contrast from the peak in 1957 at 3.77 births per women.

Demographers have expressed concerns over what this means for the future of America, as the fertility rate is below the replacement rate – producing as many births each year as deaths – of 2.1 births per woman.

The decline in births over time is the result of both economic distress as well as progress for women in the workplace, with potential long-term implications, such as a smaller workforce and higher cost of caring for the aging. It’s too soon to say whether we should be concerned about these economic effects, but it’s already clear the economy is in for a big change based off what happens to the American birthrate.

Catching up to a global shift

American women are having babies later. While US birth rates have declined for nearly all age groups of women under 35, per latest CDC data, they rose for women in their late 30s and early 40s.

But this is actually bringing the US in line with worldwide trends – or helping it catch up, depending on your perspective. High-income countries, and increasingly middle-income ones, have long seen women delaying their first child until later ages compared to American women, Percheski said.

It’s a sign of better access to education and employment opportunities, a rise in individualism and women’s autonomy, better sex education, and a shift from religious-based to more secular values, she said. But on a more individual level, having kids at a later age is also a result of women choosing to stay in school longer, waiting until later to marry, and paying off student debt first.

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American women delaying childbearing is bringing the US in line with worldwide trends.

To be sure, macroeconomic forces are another major factor in the decision to postpone having kids. Millennials have grappled with several of these, from the lingering effects of the Great Recession to soaring living costs for things like housing and, of course, childcare.

Finances are one of the top reasons why American millennials aren’t having kids or are having fewer kids than they considered ideal, Insider’s Shana Lebowitz reported, citing a survey by The New York Times. To raise a child to age 18 in America, it’ll cost parents an average of $230,000.

A ‘rain check’ on babies

Recessions typically have the strongest economic influence on birth and fertility rates. “People tend to wait during periods of political and social and rest,” Percheski said.

The Great Recession saw a 9% decline in births, per Brookings, about 400,000 babies fewer than there would have been otherwise. And while the Spanish Flu only resulted in an economic contraction, that public health crisis also led to a drop in births. A pandemic lumps together economic and health turmoil, which Brookings says could result in a greater impact on births.

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Sara Adelman became a working-from-home mom during the pandemic. Birth rates typically decline during periods of economic crisis.

But whether the current lapse in babymaking will translate to fewer babies overall or just a childbirth postponement, Percheski said. She said she thinks we’ll see a reduction in the number of women having two or three kids, as happened during the financial crisis.

Mauro GuillĂ©n, Wharton professor and author of “2030: How Today’s Biggest Trends Will Collide and Reshape the Future” told Insider that the decline in births is a “temporary blip,” likely to last one to two years.

“Young couples have said, ‘Give me a rain check, I don’t want the baby now because there’s too much uncertainty,'” he said. “But they will have those babies later. They don’t cancel their plans to have babies for life.”

A ‘demographic time bomb?’

A decline in birth rates has sparked worries that the US may be headed for what’s known as a “demographic time bomb,” in which an aging population isn’t replaced by enough young workers.

This could slow the economy in the long term by creating higher government costs and a smaller workforce, who will have to front the care costs for aging populations. It could also create a shortage of pension and social security-type funds and impact things like school enrollment and college demand.

Japan is a famous example of just such a time bomb, long ticking demographically. Experts in that country are now worried that a pandemic-fueled baby bust could worsen the country’s aging crisis that strains the working population. Like Japan, Italy is facing an aging population and dropping fertility rates, to the point where the government has begun issuing fertility ads. So far, high levels of immigration have kept the US from seeing the same economic impact that has hit these other countries.

But Percheski said a decline in births isn’t necessarily bad – it will just require structural adjustments, like creating new public policies that respond to changes in population size.

family child tax credit mothers
Today’s baby bust could end up being tomorrow’s baby boom.

In some ways, fewer classmates for those born in 2021 could be good, she added.”If there are fewer people competing for jobs when they hit the job market, that’s not bad from their perspective, but it does require us to make adjustments.”

America can also change now to avoid having to do it later, such as making childcare more affordable. “Raising children is one of the great joys of life, but it’s also one of the great burdens,” economist Tyler Cowen said in a recent panel with the American Enterprise Institute. “If we don’t have innovations to make raising children either easier or more fun or less costly, we’re in big trouble.”

But if the pandemic-fueled birth decline just results in women bearing children at a later age rather than having fewer kids or none at all, per Brookings, the fertility rate may be underestimated. It could even result in a delayed baby boom.

Guillen said he thinks we’ll see a higher number of births in 2022 and 2023, which could make preschools fuller. He said he’s more concerned with the mortality rate than the birth rate, but in any case the full effects of the birth decline won’t truly be seen until 20 to 30 years later.

“Generally, it would be better to have a smoother evolution of pace, but recessions always have their effect,” he said.

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How giving birth changes your brain

  • A new mother experiences many changes after giving birth. Some of the biggest happen in her brain.
  • When she first sees her newborn, core regions of her brain’s reward network kick in, giving her an instant connection to her baby.
  • Fathers also experience changes their brains when they spend quality time with their babies.
  • Visit Business Insider’s homepage for more stories.

Following is a transcript of the video.

A woman’s uterus grows to over 500 times its normal size during pregnancy. But not all changes are visible. In fact, some of the biggest changes happen in her brain.

When a mother sees her newborn for the first time, it’s love at first sight, literally. That’s because once she gives birth, core regions of her brain’s reward network kick in. They signal the release of feel-good hormones like dopamine and oxytocin into her blood, which immediately triggers a strong connection of love and devotion to her newborn. In fact, studies show that recent mothers have similar levels of oxytocin as romantic couples who are newly in love.

And human moms aren’t alone here. Scientists discovered that rodents got a bigger kick of dopamine from feeding their pups than from receiving injections of cocaine. What’s more, brain scans reveal that a human mom has a similar experience when she sees her infant smiling.

But it’s a different story when her baby is crying. Those cries activate a network in the mom’s brain known as the emotion regulation network. It includes the prefrontal and cingulate control systems, which help control her emotions. And that’s important since it can be easy to lose your temper when you’re running on very little sleep and are distressed by the baby’s cries.

And while motherhood can be exhausting, new moms are actually more alert than normal thanks to their brain’s salience network. Scientists think giving birth activates this network to help a mother detect threats and protect her infant from harm, especially in dangerous situations when that network can help ramp up adrenaline.

But on a daily basis, Mom needs to understand her newborn’s needs. To accomplish that, she uses empathy, which comes from her brain’s social network. It involves the insular and amygdala, which researchers found became more active when moms looked at photos of their babies in distress compared to neutral photos.

But it’s not just the mom’s brain that changes. Research shows that a dad’s brain releases oxytocin when he interacts with his baby too. This is often accompanied by a surge of another hormone: prolactin. It’s often called the milk hormone because it triggers the production of breast milk, but men can produce it too, and researchers have found that dads who frequently played with their babies had higher prolactin levels in their blood than fathers who didn’t. They were also more responsive to their baby’s cries.

So in the end, having a child is a big change. Not just for your lifestyle, for your brain too.

EDITOR’S NOTE: This video was originally published in April 2019.

Read the original article on Business Insider