In Britain, recessions mean more babies. In the US, births fall
ATTITUDES to having babies can tell us a lot about a country. In the UK, the recession went hand-in-hand with a baby-boom – and yet in the US it was accompanied by a collapse in the birth rate. In both cases, the trend is now going into reverse, mirroring the recoveries in economic fortunes: in America, the decline ended in 2012, while here in Britain the number of births fell, reversing years of increases.
The numbers are striking. In 2012 in the UK there were 884,748 conceptions by women of all ages, compared with 909,109 in 2011, a decrease of 2.7 per cent. This ended an astonishing decade long increase in fertility that began in 2001-02 and peaked in 2011 with the highest number of births for forty years. In the US, by contrast, there were 3.958m births in 2012, almost identical to 2011’s 3.953m and signalling the end of years of decline. Fertility peaked at 69.3 births per 1,000 US women aged 15-44 in 2007, at the height of the bubble, and has since plummeted to 63.2. The rise and fall perfectly matches the US economy’s ups and down.
It would, of course, be a gross exaggeration to attribute all of this rise and fall purely to economic sentiment – a correlation is not the same thing as causation. That said, there is undoubtedly an effect; in the UK, it seems that some people made the most of the recession, unemployment and the reduced opportunity cost of quitting work (because of falling wages or limited opportunities) to have more children; in the US recessions frighten people into having fewer children.
In the UK case, it may even be that the temporary dip in house prices during the recession boosted the number of births, albeit briefly. The difference in psychology and attitudes towards having children is striking; unusually, Brits seem more optimistic than Americans in this case, though both appear to consider children to be a luxury of sorts.
There are lots of other reasons for the rise and fall in the UK birthrate of course, including the crucial impact of immigration, the fact that women are delaying having children and previous demographic waves. An earlier baby bust started in 1970 and continued until 1976; after that, the number of babies rose every year, peaking in 1990, albeit at a much lower level than today. Baby numbers then slid, troughing in 2001 before surging back to new highs.
The number of babies born in an economy matters enormously. On top of the short term effect on patterns of consumer demand, housing stock requirements (more houses, fewer small flats) and the pressure on schools and other kinds of infrastructure, birth rates are one important predictor of long-term economic growth.
That is because the size of an economy depends on the size of its population, and on how much each person produces. A growing population of working age, all other things equal, boosts GDP. A combination of high birth rates and a large rise in migration in recent years means that the UK, together with France, will host Europe’s fastest growing populations over the next few decades. This will have profound implications for housebuilding, pensions, public finances, infrastructure, education, foreign direct investment and the size of Britain’s home market for goods and services.
A related piece of news is that a smaller proportion of girls aged less than 16 fell pregnant last year than at any time since 1969, the first year for which we have comparable data, when a rate of 6.9 conceptions per thousand girls aged 13-15 was recorded. Yesterday’s figures show that the under 16 conception rate has slumped from 8.1 per thousand in 2007 to 5.6 in 2012. The pessimists always forget social trends can improve – we had already seen a fall in crime and a decline in binge drinking and illegal drugs taking. So what happened in 2013 to the overall UK birth rate, as the economy bounced back? We won’t know for another year, but my guess is that the number of births fell again.
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