Speaker 1: I'm Jason Kelly. It's time for this week's cover story. Well,
Speaker 1: in the early days the pandemic, with lockdowns forcing couples
Speaker 1: to spend so much quality time together, you might have
Speaker 1: expected America to have a baby boom. But a few
Speaker 1: months later, the opposite is proving true. America is looking
Speaker 1: at a big baby bust. While some one fifty thousand
Speaker 1: Americans have died because of COVID, Brookings estimates that the
Speaker 1: US will have as many as five hundred thousand fewer
Speaker 1: babies next year. The economic implications of that deficit will
Speaker 1: linger long after the pandemic ends, as fewer babies means
Speaker 1: fewer consumers, fewer workers, and fewer taxpayers. In a time
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Speaker 1: innovation and business success. We use science and data driven
Speaker 1: insights to help you build the trust. Stakeholders demand. The
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Speaker 1: The coming baby deficit, the COVID nineteen crisis may leave
Speaker 1: a lasting imprint on us or till the trends taking
Speaker 1: a toll on growth. By Peter Coy Pandas and white
Speaker 1: rhinos aren't the only creatures that are unsuccessful at mating
Speaker 1: in captivity. The folk wisdom that humans will copulate when
Speaker 1: left with nothing else to do, dubbed the blackout babies theory,
Speaker 1: surfaces regularly in the immediate aftermath of disasters, but the
Speaker 1: baby boom never materializes. The COVID nineteen pandemics spawned predictions
Speaker 1: that stay at home orders would eventually deliver a baby bump,
Speaker 1: Yet far from having more children than usual, Americans are
Speaker 1: expecting fewer in bedrooms across the US, Couples are making
Speaker 1: decisions that in the aggregate, could prove as consequential for
Speaker 1: the long term health of our economy as those taken
Speaker 1: by policymakers in Washington. Fewer children now means fewer consumers, workers,
Speaker 1: and taxpayers in the future, in other words, a smaller
Speaker 1: economy than otherwise, though also a smaller environmental footprint, which
Speaker 1: brings its own rewards. Wolfgang Lutz, an Austrian demographer, warned
Speaker 1: in two thousand and six that European nations were at
Speaker 1: risk of falling into a fertility trap, in which there
Speaker 1: are fewer women alive to have babies, Smaller families become
Speaker 1: the social norm, and low population growth reduces economic growth,
Speaker 1: fostering a pessimism that further suppresses the birth rate. It
Speaker 1: appears that Denmark, among others, has taken Lutz's message to heart.
Speaker 1: A public service announcement urges older Danes send your child
Speaker 1: on an active holiday and get a grandchild within nine months.
Speaker 1: At the time Lootz raised the alarm, the U s
Speaker 1: seemed well clear of such a trap, with a total
Speaker 1: fertility rate of two point one children per woman, what
Speaker 1: demographers call the replacement rate versus one point five for
Speaker 1: the European Union. Now that the US rate is below
Speaker 1: one point seven, that's no longer assured. Unromantic as it sounds,
Speaker 1: planning a family is a numbers exercise that factors in
Speaker 1: the age of the would be mother, access to affordable childcare,
Speaker 1: college costs, income and job security. Toss in a national
Speaker 1: health emergency and an economic crisis that invites comparisons to
Speaker 1: the Great Depression, and the benefits of parenthood no longer
Speaker 1: pencil out for many. The Guttmacher Institute surveyed about two
Speaker 1: thousand American women in late April and early May and
Speaker 1: found that wanted to delay pregnancy or have fewer children
Speaker 1: as a result of the pandemic that outweighed the seventeen
Speaker 1: percent who said they wanted children sooner or more of them.
Speaker 1: In June, the Brookings Institution released a study predicting the
Speaker 1: US is headed for a large, lasting baby bust. Its
Speaker 1: researchers forecast there will be three hundred thousand to five
Speaker 1: hundred thousand fewer children born in the US than there
Speaker 1: would have been absent the crisis, which amounts to a
Speaker 1: decrease of roughly ten from That means the number of
Speaker 1: babies never born is likely to greatly exceed the number
Speaker 1: of America kins who have died from coronavirus, which is
Speaker 1: now about one fifty thousand. The effect on population will
Speaker 1: be longer lasting as well. Many of the babies who
Speaker 1: aren't being born would have lived into the twenty second century.
Speaker 1: A lot of people I know at work and friends
Speaker 1: are saying they don't want to have children until this
Speaker 1: is over, says Tory Marsh, director of research at good
Speaker 1: r X, a price comparison and coupon site for prescription
Speaker 1: drugs based in Santa Monica, California. Marsh postponed her wedding,
Speaker 1: which had been scheduled for November. Because of the pandemic,
Speaker 1: it is definitely pushing back the timeline for babies. She says.
Speaker 1: If couples fully make up for lost time by having
Speaker 1: more children later, this drop in the birth rate will
Speaker 1: end up being just a blip. But demographers predict that many,
Speaker 1: if not most, of the births that are delayed will
Speaker 1: never be made up. There is this Panglossian narrative that
Speaker 1: delayed births will tend to recover, but statistically it doesn't happen,
Speaker 1: says Lie in Stone, chief information officer of Demographic Intelligence,
Speaker 1: a consulting firm whose clients have included Procter and Gamble
Speaker 1: and JP Morgan Chase. Lack of time is the most
Speaker 1: important reason the birth rate is unlikely to revert back
Speaker 1: to trend once the pandemic is over. While young women
Speaker 1: will still have plenty of years to give birth to
Speaker 1: their desired number of children, older ones will need to
Speaker 1: space births more tightly to reach their targets. In their
Speaker 1: remaining fertile years, some will run out their biological clock
Speaker 1: waiting for baby making conditions to improve. Every time that
Speaker 1: people decide to push back when they're going to have
Speaker 1: their first kid or their next kid. Some proportion will
Speaker 1: end up not having the child at all, says Karen Guzzo,
Speaker 1: a sociology professor at Bowling Green State University and acting
Speaker 1: director of the Center for Family and Demographic Research. For
Speaker 1: couples who are already parents, says Guzzo, the longer you
Speaker 1: wait to have your second or third child, the harder
Speaker 1: it is to say, oh, I'm ready to have babies again.
Speaker 1: They say, you know what, my family is complete. I'm
Speaker 1: happy with what I have. In the second half of
Speaker 1: the twentieth century, the pattern in the US and elsewhere
Speaker 1: was that fertility tended to fall during recessions and then
Speaker 1: bounced back when the economy recovered. Demographers expected that to
Speaker 1: happen after the two thousand and seven to two thousand
Speaker 1: and nine recession, which at the time had been the
Speaker 1: deepest since the Depression. People put off having children during
Speaker 1: the economic downturn and then catch up on fertility once
Speaker 1: economic conditions improve, Pew Research Center wrote in October report.
Speaker 1: But the pattern broke. The post recession rebound never came,
Speaker 1: even as the U s economy staged the longest expansion
Speaker 1: on record. Birth rates for women in their twenties, which
Speaker 1: had dropped twenty five or more during and shortly after
Speaker 1: the recession, kept falling and they stayed flat for women
Speaker 1: in their thirties. Had pre recessionary fertility patterns been sustained through,
Speaker 1: there would have been six point six million more births
Speaker 1: and nearly three million more women would have had their
Speaker 1: first child over the last eleven years, says Kenneth Johnson,
Speaker 1: a sociologist and demographer at the University of New Hampshire's
Speaker 1: Carci School of Public Policy. Early indicators point to the
Speaker 1: birth rate moving down another notch in this recession. The
Speaker 1: Wedding Report says its surveys show that slightly over sixty
Speaker 1: of weddings scheduled for have been postponed until later this
Speaker 1: year or one that's bound to delay some couples from
Speaker 1: starting a family. Also, when the pandemic broke out, birth
Speaker 1: control providers reported an increase in sales from people stocking
Speaker 1: up in case of shortages. Some sources have also seen
Speaker 1: a bump in demand for long lasting forms of birth control.
Speaker 1: The Pill Club Holdings logged a sixty increase in June
Speaker 1: in new patient requests for an overa a vaginal ring
Speaker 1: that prevents pregnancy for up to a year. In the US,
Speaker 1: contraception has generally been available to those who need it,
Speaker 1: in contrast to the situation in poor and middle income countries,
Speaker 1: where disruptions and access to birth control may result in
Speaker 1: as many as seven million unintended pregnancies in just half
Speaker 1: a year, according to an April estimate by the United
Speaker 1: Nations Population Fund. Planned Parenthood Federation of America has seen
Speaker 1: an increase in demand for abortion pills, according to doctor
Speaker 1: Gillian Dean, senior director of medical Services. She says several
Speaker 1: women have come to her for help to end pregnancies
Speaker 1: that they would have wanted to continue were it not
Speaker 1: for the economic fall out of the pandemic. With almost
Speaker 1: eighteen million Americans out of work as of June, it's
Speaker 1: no wonder many couples might not be in the mood
Speaker 1: for procreating. Demographer Sergio Della Pergola has documented a tight
Speaker 1: statistical correlation between optimism and fertility in Israeli society. The
Speaker 1: Bloomberg u S National Economy Expectations Diffusion Index, which gauges
Speaker 1: consumers economic outlook, crashed below thirty in April and May
Speaker 1: from fifty seven in February, recovering to thirty eight point
Speaker 1: five in July. Not everyone will wring their hands at
Speaker 1: the thought of all those missing children. Some environmentalists may
Speaker 1: view the US birth dearth as good for the planet.
Speaker 1: Each American consumer is responsible for about three times the
Speaker 1: amount of greenhouse gas emissions as a Chinese consumer, according
Speaker 1: to a nineteen report by the United Nations Environment Program.
Speaker 1: A twenty seventeen study from Sweden's Lund University published in
Speaker 1: Environmental Research Letters found that having fewer children is the
Speaker 1: best thing that people in rich countries could do for
Speaker 1: the planet, far more effective than buying an electric car
Speaker 1: or refraining from air travel. On the other hand, each
Speaker 1: child who's wanted but not born is some Famili's quiet tragedy.
Speaker 1: Surveys such as the National Survey of Family Growth show
Speaker 1: that the average American woman wants two children, or possibly three,
Speaker 1: depending on how long it lasts. The COVID nineteen crisis
Speaker 1: may compel many women not to fulfill that design. Fire
Speaker 1: For the economy, fewer future workers will entail a bigger
Speaker 1: burden on each one to support future retirees. Every two
Speaker 1: tenths decline in the total fertility rate. That is too
Speaker 1: fewer children per ten women necessitates an increase in the
Speaker 1: social security payroll tax of about point four percentage points.
Speaker 1: According to a table in the annual Report of the
Speaker 1: Trustees of the Social Security Trust Funds, slow or negative
Speaker 1: population growth tends to depress economic dynamism, some economists argue.
Speaker 1: In a research paper published in January, Charles Jones, a
Speaker 1: professor at Stanford University's Graduate School of Business, posits that
Speaker 1: so called natalist policies, such as offering couple's financial incentives
Speaker 1: to have more children, could spell the difference between an
Speaker 1: expanding cosmos of exponential growth in both population and living
Speaker 1: standards and an empty planet in which incomes stagnate and
Speaker 1: the population vanishes. It's worth noting that countries, including hungry
Speaker 1: Poland and more recently Russia, have had little success in
Speaker 1: reversing declining fertility rates with subsidies. Even when the pandemic
Speaker 1: is over, many of the factors that have pushed down
Speaker 1: fertility rates in the US will remain in place. Those
Speaker 1: include the penalty to women's careers for having children and
Speaker 1: the high cost of childcare, education, and health insurance. Childcare
Speaker 1: is particularly salient for couples who already have one child
Speaker 1: because they're more aware of how problematic it is, says
Speaker 1: Bowling Green's Guzzoh. In some states, childcare is more expensive
Speaker 1: than college. As important as child care is pandemic related,
Speaker 1: federal aid given to the sector has been less than
Speaker 1: the sum given to Delta Airlines. University of Michigan economist
Speaker 1: Betsy Stevenson told Politico Magazine any attempt to divine the
Speaker 1: future of fertility is complicated by the fact that there
Speaker 1: are different ways to measure it, and sometimes they contradict
Speaker 1: each other. One indicator that's pointing strongly negative is the
Speaker 1: number of earths, which hit a thirty five year low
Speaker 1: last year and is likely to be even lower this year.
Speaker 1: Another is the total fertility rate, which is a snapshot
Speaker 1: of the birth rates for women of all ages in
Speaker 1: a given year. It has fluctuated wildly over the past century.
Speaker 1: It was three point thirty one at the end of
Speaker 1: World War One, fell to two point fifteen during the Depression,
Speaker 1: rose to three point sixty eight in nineteen fifty seven,
Speaker 1: fell to one point seventy four in nineteen seventy six,
Speaker 1: then rose to two point one two in two thousand seven.
Speaker 1: At that time just before the financial crisis, the U
Speaker 1: S rate was among the highest of the wealthy nations.
Speaker 1: A total fertility rate of about two point one the
Speaker 1: replacement rate is what's required to stabilize the population over
Speaker 1: the long term, but the two thousand seven peak in
Speaker 1: fertility was short lived. The rate fell in the last
Speaker 1: recession and kept going down after it, falling to one
Speaker 1: point eighty nine and twenty eleven and hitting one point
Speaker 1: sixty eight last year. The fact that the total fertility
Speaker 1: rate has fluctuated widely suggests that there's at least a
Speaker 1: possibility its next move is up. That's what the Social
Speaker 1: Security Trustees are banking on. Their twenty twenty annual report,
Speaker 1: which was prepared before the pandemic, makes an intermediate projection
Speaker 1: that the total fertility rate will rise to one point
Speaker 1: ninety five by twenty twenty nine and then stay there
Speaker 1: through twenty ninety five, the end of the forecast period.
Speaker 1: In an emailed statement, Social Security Chief Actuary Stephen Goss
Speaker 1: cited the surveys that women want two or more children
Speaker 1: that suggests that the current reduction in the total fertility
Speaker 1: rate will not be permanent. He wrote, setting aside the
Speaker 1: current crisis, it's possible that today's twenty something women intend
Speaker 1: to have babies at later ages than their mothers or
Speaker 1: older sisters did. If so, that wouldn't be reflected in
Speaker 1: today's low total fertility rate. The total fertility rate is
Speaker 1: a tricky concept. It's the number of children an imaginary
Speaker 1: woman would have over her lifetime if likelihood of having
Speaker 1: a baby in each year of life matched what the
Speaker 1: birth rate is now for women of that age. For example,
Speaker 1: at sixteen, she experiences the birthrate of today's sixteen year olds.
Speaker 1: At thirty eight, she experiences the birth rate of today's
Speaker 1: thirty eight year olds. In contrast, the easier to understand
Speaker 1: completed fertility rate measures how many babies women actually have
Speaker 1: over their reproductive lives. That number has stayed high. Today's
Speaker 1: women who are forty nine years old have had two
Speaker 1: point one children on average, which is a bit higher
Speaker 1: than the forty nine year olds of a few years ago. Certainly,
Speaker 1: women who are undergoing fertility treatments are as determined as
Speaker 1: ever to have children. Eva Pensi Moog, thirty one, a
Speaker 1: user experience designer from Chicago, says some of the older
Speaker 1: women in her infertility support groups are literally in a
Speaker 1: race against the clock to collect as many eggs as
Speaker 1: they can before they're gone. Julie christ thirty nine and
Speaker 1: Rachel Anderson thirty one, of Bristol, Connecticut, it who have
Speaker 1: a nineteen month old son, are trying for another child
Speaker 1: via in vitro fertilization. Sometimes we ask ourselves, what the
Speaker 1: heck are we doing. The world is so weird, says Anderson.
Speaker 1: You can call it naive. We want kids with Alexander
Speaker 1: Tensi and Mayieve She. And that's this week's cover story
Speaker 1: by Peter Koy. Find that story and all of the
Speaker 1: latest issue at Bloomberg dot com and business week dot com.
Speaker 1: I'm Jason Kelly. Check us out. Every day are Bloomberg
Speaker 1: Business Week Radio Show from two to six pm Wall
Speaker 1: Street Time. This is Bloomberg.