A report published on Monday by the National Bureau of Economic Research shows a correlation between a drop in pregnancy rates and imminent recession.
The report, titled ‘Is fertility a leading economic indicator?’, is the first of its kind and could offer new insight into predicting financial difficulties on a national or international scale.
The paper used birth rate information from a period of 1989 to 2016 and matched these figures against the GDP rates across that period as a prediction mechanism for recession. Over 100 million births occurred in the US in that period, and pregnancies fell six months prior to the past three economic downturns.
Graph courtesy of the National Bureau of Economic Research
The report isn’t the first to suggest that couples are cautious about finances when planning to have a child and react to the economy, but it is the first to prove that such decision making is predictive.
The newly discovered information is not to be taken as the be all and end all of how to predict recessions however. The research performed extended back to 1968, but the economic cycles between 1968 and 1988 did not fit this pattern – suggesting that other cultural or social factors could be influencing rates.
