From Our 2008 Archives

Shrinking Economy Puts Baby on Hold

The Last Four U.S. Recessions Have Been Followed by Declines in the Country's Fertility Rate

Caroline Wilbert
WebMD Health News

Reviewed By Louise Chang, MD

Oct. 14, 2008 -- Maternity wards may get a bit quieter in about nine months.

That's because recessions and babies apparently don't mix. It's been true for the last four recessions, and experts are predicting a similar downturn now. There's plenty of bad economic news out there: the crisis on Wall Street, record foreclosures, high prices for gas and food. A recent study by the American Psychological Association showed that 80% of Americans are stressed about the economy.

At times like this, demographers say, Americans postpone starting a family and think twice about adding a baby to a family that is already struggling.

Tony Marks, a mortgage broker in Florida, and his wife, a schoolteacher, have been married for just over two years. "We honestly thought we'd have kids by now, but have put it on hold because of financial issues," says Marks, who is 31.

His industry has been hit hard, and the couple have lost a lot in their retirement accounts because of the stock market slide. Also, they are helping his wife's sister, who is struggling to pay her mortgage and can't sell her home because she owes more than it is worth.

"The economy has definitely affected our plans for starting a family," he says.

Recessions and Babies: A Costly Proposition

It's no surprise couples may be thinking twice: The annual cost of raising a child is between $10,930 and $12,030, according to the most recent estimates from the United States Department of Agriculture. These estimates are for a child living in a middle-income family with two kids and two adults.

In current times, many couples also must evaluate the cost of fertility treatments. In vitro fertilization costs on average more than $12,000.

Although some doctors say they haven't yet seen a change in patient load, demographers stress that the results won't be apparent for a while -- pregnancy after all lasts on average 38 weeks. Couples report that money concerns are an increasingly big part of family planning discussions.

Recession and Babies: A History Lesson

Although a number of factors, including demographic and social trends, contribute to the fertility rate (the number of babies born per year per 1,000 women between the ages of 15 and 44), the economy also appears to affect the numbers.

The last four recessions in the United States have been followed by a dip in the fertility rate, according to economic data from the National Bureau of Economic Research and fertility data from the National Center for Health Statistics, a division of the CDC.

  • In the early 1970s, a recession lasted from November 1973 until March 1975. The fertility rate, 68.8 in 1973, fell for the next three years, bottoming out at 65 in 1976, the year after the recession ended. It climbed again the next year.
  • The early '80s brought more tough times. The economy was officially in a recession from January 1980 to July 1980 and again from July 1981 until November 1982. The fertility rate was 68.4 in 1980 and fell for the next four years to 65.5 in 1984. It increased again in 1985.
  • In July 1990, the country fell into a recession that lasted until March 1991. The fertility rate, which had been climbing throughout the late '80s, hit 70.9 in 1990, the highest rate in nearly two decades. However, the next year, following the recession, it started falling again and declined to 63.6 in 1997.
  • After the dot-com bust, the country was in a recession from March 2001 until November 2001. Again, fertility rates dipped the next year, falling from 65.3 in 2001 to 64.8 in 2002.

Recession and Babies: The Current Economic Crisis

The NCHS data cannot provide any insight into the current economy's effect on the fertility rate. In addition to the length of pregnancy, it takes a while for the NCHS to compile data. The most recent birth rate information available is from 2005.

But using history as a lesson, Carl Haub, demographer at the Population Reference Bureau, says he expects to see a slight drop in the fertility rate in the United States. If the economy gets worse -- and people become as scared as they were in the mid-'70s amid the oil crisis -- the drop may be more dramatic, he says.

The shifts typically are not sudden -- in either direction. "There is a certain amount of lag time," Haub says. "When the economy improves, it is not like people rush out and say, 'Let's have a baby.'"

Khalil Tabsh, chief of obstetrics at UCLA, says he expects to see fewer families having third and fourth children, especially among the middle class. "If you have two kids and you aren't sure if you are going to lose your job, you are going to think twice about having another baby," he says. He has not yet seen a decrease in his patient load.

Recessions and Babies: Infertility Treatments

Hilton Kort, a fertility doctor and the founder of Reproductive Biology Associates in Atlanta, also says he has not seen a shift so far. Since he began practicing in vitro fertilization in 1983, he has not seen his business fluctuate with economy.

After Sept. 11, he even saw an increase as people worried less about material things and more "about what is really important, and that's having a family," he says.

In good and bad times, most of his patients are concerned about finances because many insurance companies do not cover fertility treatments. His firm puts patients in touch with companies that offer low-interest loans, and so far, those companies have not tightened requirements for credit.

The only economic impact he's seen so far? More patients are saying they'd like to have twins, a relatively common result of fertility treatments. Though he and other doctors have worked to reduce multiple births because of potential pregnancy complications, some couples want twins because they can only afford to complete the process once and they want two children, Kort says.

Recessions and Babies: A Different Decision

Jennifer Gniadecki, 33, and her husband also reconsidered their plans. Already the parents of two young girls, the couple wanted to try for a boy. Gniadecki, who does freelance writing for companies including Wal-Mart, is busy with work now but never knows how much she will have a few months down the road. If the economy gets worse, she fears she might lose her income.

Her husband works in online advertising, "but we can't trust he will keep that full-time job if there is a recession," she says.

The Chicago-area couple ultimately decided to cut back on spending but still try to conceive another baby. "It is knowing what's important," she says.

With a laugh, she adds: "The more children we have, the more likely it is that one of them will take care of us when we're old."

SOURCES: Carl Haub, demographer, Population Reference Bureau. Diane Macunovich, professor, University of Redlands. Khalil Tabsh, chief of obstetrics, University of California at Los Angeles. Hilton Kort, founder and CEO, Reproductive Biology Associates. Jennifer Gniadecki, freelance writer. Anthony Marks, mortgage broker. National Bureau of Economic Research: "Business Cycle Expansions and Contractions". National Center for Health Statistics: "Live Births, Birth Rates, and Fertility Rates, by Race, United States, 1909-2003." American Psychological Association: "Stress in America." WebMD Medical Reference: "A Couple's Guide: Trying to Conceive." United States Department of Agriculture: "Expenditures on Children by Families, 2007."

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